GeneDx Holdings Corp. (NASDAQ: WGS)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0001818331
Market Cap 2.56 Bn
P/B 8.77
P/E 1,230.73
P/S 6.37
ROIC (Qtr) 2.58
Div Yield % 0.00
Rev 1y % (Qtr) 51.86
Total Debt (Qtr) 113.16 Mn
Debt/Equity (Qtr) 0.39

About

GeneDx Holdings Corp., known by its stock symbol WGS, operates in the diagnostics and data science industry, combining decades of genomic expertise with the ability to interpret clinical data at scale. The company was established in 2000 by scientists from the National Institutes of Health with a mission to make genetic testing accessible for patients with rare diseases. Today, GeneDx is recognized as a leader in genomics, with a proven track record of expertise in genetic testing. GeneDx's primary business activities revolve around genetic testing,...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 95.97M provide 21.67x coverage of short-term debt 4.43M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 308.52M provides 2.73x coverage of total debt 113.16M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 33.19M provides exceptional 12.21x coverage of interest expenses 2.72M, showing strong debt service capability.
  • Short-term investments of 59.11M provide solid 1.80x coverage of other current liabilities 32.86M, indicating strong liquidity.
  • Tangible assets of 308.52M provide robust 9.39x coverage of other current liabilities 32.86M, indicating strong asset backing.

Bear case

  • Operating cash flow of 33.19M barely covers its investment activities of (50.96M), with a coverage ratio of -0.65, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (50.96M) provide weak support for R&D spending of 59.07M, which is -0.86x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 95.97M provide limited coverage of acquisition spending of (33.20M), which is -2.89x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 60.94M relative to inventory of 10.57M (5.77 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 33.19M shows concerning coverage of stock compensation expenses of 25.23M, with a 1.32 ratio indicating potential earnings quality issues.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 234.48 Bn 35.69 5.36 35.68 Bn
2 DHR Danaher Corp /De/ 171.11 Bn 48.85 7.05 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 57.62 Bn 56.08 13.83 1.09 Bn
4 IQV Iqvia Holdings Inc. 42.37 Bn 33.03 2.66 15.19 Bn
5 A Agilent Technologies, Inc. 42.16 Bn 32.36 6.07 3.35 Bn
6 NTRA Natera, Inc. 31.64 Bn -102.32 14.95 0.18 Bn
7 MTD Mettler Toledo International Inc/ 30.89 Bn 36.96 7.84 2.21 Bn
8 WAT Waters Corp /De/ 23.59 Bn 36.37 7.60 1.49 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.27 2.82
EV to Cash from Ops. EV/CFO 78.46 19.55
EV to Debt EV to Debt 23.01 54.87
EV to EBIT EV/EBIT 498.44 18.82
EV to EBITDA EV/EBITDA 76.89 4.36
EV to Free Cash Flow [EV/FCF] EV/FCF 168.36 17.63
EV to Market Cap EV to Market Cap 1.02 1.58
EV to Revenue EV/Rev 6.47 5.06
Price to Book Value [P/B] P/B 8.77 1.35
Price to Earnings [P/E] P/E 1,230.73 18.88
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -2.00
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.94
Interest Coverage Int. cover (Qtr) 1.92 -128.90
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -267.86 -35.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 65.77 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 105.41 9.72
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 196.28 -444.66
EBIT Growth (1y) % EBIT 1y % (Qtr) 106.46 8.29
EBT Growth (1y) % EBT 1y % (Qtr) 102.98 -6.03
EPS Growth (1y) % EPS 1y % (Qtr) 103.54 15.59
FCF Growth (1y) % FCF 1y % (Qtr) 125.78 56.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 76.23 185.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.81 0.57
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 1.10 1.23
Current Ratio Curr Ratio (Qtr) 2.71 2.70
Debt to Equity Ratio Debt/Equity (Qtr) 0.39 -0.84
Interest Cover Ratio Int Coverage (Qtr) 1.92 -128.90
Times Interest Earned Times Interest Earned (Qtr) 1.92 -128.90
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.20 -97.22
EBIT Margin % EBIT Margin % (Qtr) 1.30 -115.64
EBT Margin % EBT Margin % (Qtr) 0.62 -114.24
Gross Margin % Gross Margin % (Qtr) 69.60 44.76
Net Profit Margin % Net Margin % (Qtr) 0.50 -113.12