What happened
Shares of NeoGenomics (NASDAQ: NEO) were up 23.52% Thursday afternoon after the company released its full-year and fourth-quarter report. The company, which focuses on oncology testing, has seen its shares rise more than 79% so far this year.
So what
The healthcare company operates under two segments: pharma services and clinical services. This past summer, NeoGenomics appeared to be struggling with reduced revenue and earnings, but now appears to be on the road to recovery. The company reported fourth-quarter revenue of $139 million, up 10% year over year and up 8% sequentially. Both of the company's segments rose with clinical services reporting $108 million in sales, up 4% over the same period last year and pharma services jumping 41% year over year to $31 million in quarterly revenue. The company said the reasons for the improved numbers include improved revenue per test, testing volume, and better pharma services revenue.
The company said it had 2022 revenue of $510 million, up 5%. It did lose $142.3 million in net income in 2022, compared to a loss of $8.3 million the year before. However, the company only lost $23 million in the quarter compared to the $42 million it lost in the same period in 2021.
The biggest driver in the stock's price was the progress the company seems to be making, with three consecutive quarters of improved revenue, adjusted gross profits, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). NeoGenomics may have also gotten a boost because of the guidance it issued for 2023. It said it anticipates revenue of between $545 million and $555 million, representing 7% to 9% growth, and adjusted EBITDA to fall between a loss of $27 million and a loss of $22 million, showing an improvement of 44% to 54% over 2022.
Now what
Much of the turnaround has occurred under new CEO Chris Smith, who was hired in July. Now, investors will want to see further revenue growth and, eventually, a bottom line that shows a profit.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NeoGenomics. The Motley Fool has a disclosure policy.
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