Why Fulgent Genetics Stock Was Crushing It on Friday

Key Points

• The company posted an unexpected profit in its latest reported quarter.

• That was accompanied by a double-digit improvement in revenue.

• 10 stocks we like better than Fulgent Genetics ›

Friday's stock market was generally a gloomy place, but apparently someone forgot to tell Fulgent Genetics (NASDAQ: FLGT). The company's shares were soaring in late-session action, with a very healthy rise of more than 8%. At that point, the bellwether S&P 500 index was mired in a funk with a nearly 2% decline. Fulgent's latest earnings release was a major reason for this dichotomy.

A surprise on the bottom line

That morning, before market open, Fulgent unveiled its second-quarter results. The genetic testing specialist posted revenue just shy of $82 million, a figure that was more than 15% higher year over year. Non-GAAP (adjusted) net income went the opposite way with a steep (56%) decrease to slightly over $2 million ($0.07 per share).

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Yet the analysts tracking the stock were, as a group, expecting worse. In fact, they were modeling an adjusted bottom-line loss of $0.18 per share on revenue of only $76 million.

In its earnings release, Fulgent credited diversification for the better-than-expected results. It quoted CEO Ming Hsieh as saying that throughout the first half of this year, "we made good progress in growing revenue for our laboratory services business and in advancing our clinical trials for the therapeutic development business."

The kind of adjustment investors love

Fulgent also raised its revenue and adjusted bottom-line guidance for full-year 2025.

Management now anticipates the company will book "core" revenue -- that is, revenue minus the take from COVID testing products and services -- of roughly $320 million and an adjusted net loss of $0.35 per share. Those numbers top the average pundit projections of $0.55 for net loss and under $311 million for revenue.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fulgent Genetics. The Motley Fool has a disclosure policy.