On Aug 12, 2014, Zacks Investment Research upgraded
Genomic Health Inc.
) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold).
Reasons for the Upgrade
Shares of this California-based healthcare solutions provider
have been trailing upward since it reported decent financial
results for the second quarter of 2014 on Aug 7.
The company delivered better-than-expected second-quarter 2014
results with the top line beating the Zacks Consensus Estimate and
the bottom line coming in narrower than the same.
The company reported loss per share of 15 cents, narrower than
the Zacks Consensus Estimate of loss of 28 cents, with a positive
surprise of 46.4%. Also on a sequential basis, Genomic Health's net
loss in the reported quarter was narrower on the back of stronger
top-line performance and lower research and development spending.
Sales grossed $70.5 million, up 10.7% year over year, exceeding
the Zacks Consensus Estimate of $69 million. The year-over-year
improvement was primarily driven by Genomic Health's solid cash
revenue and test growth.
The company's international test results, representing
approximately 20% of the total test volume, jumped 32% during the
second quarter. The company also experienced 13% growth in
worldwide adoption of Oncotype DX in invasive breast cancer.
Throughout the second quarter, Genomic Health experienced an
impressive adoption in its prostate cancer tests, which accelerated
at a strong rate and resulted in a 54% rise in its overall test
volume on a sequential comparison. During the American Urological
Association (AUA) annual meeting, the company presented positive
results reinforcing the robustness of the Oncotype DX prostate
cancer test development. This showed that the test can predict
clinical recurrence for all patients regardless of whether they
received hormonal therapy, radiation therapy or no therapy at all
at the time of biochemical recurrence.
The Zacks Consensus Estimate for loss in 2014 and 2015 are also
declining. The Zacks Consensus Estimate for 2014 and 2015 have
improved from loss of 88 cents a month ago to 81 cents and from
loss of 68 cents to 59 cents, respectively.
Other Stocks to Consider
Genomic Health currently has $868.9 million worth of market
capitalization. Some better-ranked stocks in the Med-Biomed/Generic
industry include Actelion Ltd. (
), Curis, Inc. (
) and Cytokinetics, Incorporated (
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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