We recently compiled a list of the 10 Best Genomics Stocks To Buy Right Now. In this article, we are going to take a look at where Fulgent Genetics, Inc. (NASDAQ:FLGT) stands against the other genomics stocks.
Genomics is the study of genes and how they function. Many rapidly growing companies are emerging in the genomics field as technological advances substantially reduce the cost, accuracy, and time required to map a human being’s genome.
Investors in innovation, like Cathie Wood, the CEO of ARK Investment Management, believe that these developments are bringing about a “Genomic Revolution.” She stressed the potential of genomics and urged investors to see beyond conventional market benchmarks to seize revolutionary growth. On the eToro’s Digest & Invest podcast on October 21, 2024, Wood emphasized that concentrating only on the most prominent indexes may restrict exposure to ground-breaking innovation. She stated that reduced AI training costs have boosted genomics productivity, opening the door to important breakthroughs like gene editing that targets diseases. She is nevertheless optimistic about these stocks’ long-term worth, despite the present market reluctance and cash flow-driven tendencies made worse by ongoing high interest rates. According to Wood, avoiding this industry may result in missed opportunities as it progresses from development that relies heavily on investments to future profitability. She believes the market is changing and that early adopters will benefit from the convergence of genomics and AI.
Nonetheless, there have been encouraging breakthroughs from a number of genomic companies in 2024, and investors have seen financial rewards as the biotechnology sector of the broader market has risen by 29.33% since the beginning of the year.
According to Grand View Research, the global genomics market was estimated to be worth $32.65 billion in 2023 and is projected to grow at a compound annual growth rate of 16.5% between 2024 and 2030. Factors including the rising need for customized treatment, gene therapy, drug development, rising cancer rates, and a notable surge in consumer genomics demand in recent years are all contributing to the genomics market’s expansion. The pharmaceutical and biotechnology companies segment dominated the global genomic market in 2023, as per the aforementioned research. In terms of market share, North America held the biggest share in 2023 (42.65%), while Asia Pacific is anticipated to develop at the fastest rate during the forecast period.
The fields of gene editing and cell and gene therapies (CGTs) are also developing quickly. The UK approved Casgevy for sickle cell disease and β-thalassemia, pointing out the potential of CRISPR gene editing. According to Deloitte’s research report, the growing market for CGTs, from US$5.3 billion in 2022 to $19.9 billion in 2027, signals a shift towards customized advanced medicine despite high costs leading innovative business models. Furthermore, as per the report, GenAI can analyze a variety of information, such as clinical history, genomes, and social determinants of health, to produce deeper insights that have the potential to completely transform the way healthcare is delivered.
Looking forward, Chris Garabedian, CEO of Xontogeny and Venture portfolio manager at Perceptive Advisors, stated:
“I think 2024 will be a transition year, a little more carnage left and a clearing. There are signs of hope this year, and after the election and that uncertainty is behind us, I think we’re going to start to see 2025 look healthy.”
Methodology:
We sifted through holdings of Genomics ETFs and online rankings to form an initial list of 20 genomics stocks. Then we selected the 10 stocks that had the highest upside potential. The stocks are ranked in ascending order of the upside potential, as of November 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
A healthcare worker in a protective suit making molecular diagnostic tests.
Fulgent Genetics, Inc. (NASDAQ:FLGT)
Upside potential as of November 14: 54.72%
Fulgent Genetics, Inc. (NASDAQ:FLGT) is a technology company that specializes in genetic testing and provides clinicians with clinically meaningful diagnostic information. The firm is involved in both therapeutic development and laboratory services. Technical laboratory services and expert interpretation of test findings by certified medical professionals are two aspects of the laboratory services industry that contribute significantly to income. Developing medication candidates to treat a variety of tumors is the main goal of its therapeutic development segment. The two geographic categories are foreign and the United States, which produces the vast majority of the revenue.
The company’s major focus has once again shifted to its core genetic testing business, which does not include COVID-19 testing. Fulgent Genetics, Inc. (NASDAQ:FLGT) offers cancer diagnostics, newborn genetic testing, and genetic disease carrier screening. In April 2022, the company purchased Inform Diagnostics, a leading independent pathology lab.
Fulgent Genetics, Inc. (NASDAQ:FLGT) is evolving from a diagnostic company to a comprehensive healthcare company that specializes in oncology. Despite its historical reliance on COVID-19 test revenue, Fulgent has a stable financial sheet and no debt, and its core business has risen dramatically.
Fulgent Genetics, Inc. (NASDAQ:FLGT) reported $71.7 million in total sales in its third-quarter 2024 financial release, with core revenue increasing 9% year over year. The company earned $9.4 million in non-GAAP profits and $0.4 million in adjusted EBITDA income despite a $14.6 million GAAP loss. FLGT’s cash position is strong, with $815.4 million in cash, cash equivalents, and investments.
The company is moving forward with preclinical research for FID-022 and its clinical trials, including the Phase 2 trial of FID-007 for head and neck cancer. Fulgent Genetics, Inc. (NASDAQ:FLGT) is confident in its full-year core sales projection of $280 million and higher earnings per share.
Overall FLGT ranks 4th on our list of the best genomics stocks to buy. While we acknowledge the potential of the FLGT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FLGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
