GenMark Diagnostics Inc.
), a leader in multiplex molecular test systems increased its
revenue guidance for the second quarter and full-year 2012. For the
second quarter, it now expects revenue to be in the range of $3.2
million to $3.6 million. It also expects more than $15.0 million
revenue compared with its earlier guidance of more than $10.0
million for 2012.
The revision is primarily based on its strong year-to-date
performance. The revised second quarter guidance implies a
sequential revenue growth rate in the band of 48.2%-66.7%. The 2012
guidance implies more than three-fold year-over-year jump in
Management stated that the sound strategy execution has
increased market penetration of its products. Given the increase in
the utilization rate of its testing system, coupled with estimated
growth on the back of test menu expansion, management has raised
its revenue guidance. Demand for the company's products has been
stronger than prior expectations, thereby reflecting a dynamic and
robust growth opportunity. The upturn in guidance is in fact
aligned to market expectations.
The Zacks Consensus Estimate for the second quarter and full
year are $3 million and $13 million, respectively. Thus, company
guidance exceeds the Zacks Consensus Estimate for both the periods.
We expect a positive estimate revision in the near-term, based on
the company's optimistic view.
Net loss from operations and the company's failure to achieve
profitable growth remains an overhang. The operating expenses are
expected to increase in the coming years as the company attempts to
expand its customer base and increase research and development
expenditure to upgrade its technology. Increasing competition from
) is also a matter of concern.
However, the rigorous sales and marketing efforts coupled with
production efficiency is expected to yield positive results for
GenMark. The favorable market conditions and extended customer base
are also expected to boost the company's top-line. The stock
currently retains a Zacks #2 Rank, which implies a short-term Buy
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