QS Research · Michael Burry's Scion Capital analyst template · 2006
GeneDx Holdings Corp. (WGS)
As of 2026-11-10 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -42% · upside +88%
At $65.72 the market pays 4.23x TTM EV/Sales for a TTM business with EBIT of -$99.6M and FCF of -$102.2M, so the stock is not cheap on operating earnings; it is a sales-multiple option on exome/genome growth. The 2026-11-09 Q3 beat and reiterated $475-490M FY2026 revenue guide support an upside re-rate toward the 8.01x genomics peer multiple, while the September 2026 PAMA preliminary rate cuts and the 2026-05-04 guidance reset justify a downside toward the 2.45x profitable-lab multiple; those dated catalysts, not cheapness alone, are why I use a rerated scenario range. My base stays at today's 4.23x on $460.8M TTM revenue, which is essentially today's price, so the rule is not met even though the scenario spread is wide. Verdict: watch, not long, because base-case value is not +30% and the downside is worse than -25%.
Key numbers
- Share price: $65.72
- Market cap: $1.97B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $460.8M
- Price / book: 8.05x
The 15 boxes
- ✓ 1. Long-form business notes
GeneDx is now a commercial genomic diagnostics company: FY2025 revenue was $427.5M and substantially all came from diagnostic test reports, while FY2025 operating loss was $13.1M and operating cash flow was +$33.3M. The oldest annual report provided is a FY2020 blank-check company with no operations or revenue, so the filing history shows the transition from a SPAC shell to a genomic-testing business after the Sema4 combination and GeneDx/Fabric acquisitions. The sources give product, volume, customer and market detail but no reportable segment breakouts or test-level unit economics.
- ✓ 2. Competitive advantage
The sources do not show a durable competitive advantage: FY2025 gross profit was $298.2M against revenue of $427.5M and operating cash flow turned positive at $33.3M, but operating income was still -$13.1M and net income -$21.0M. The 10-K describes intense competition, only limited patent protection, dependence on a few suppliers including competitor Illumina, payor reimbursement risk, and a single Gaithersburg production site for exome and whole-genome sequencing. Named principal competitors are Baylor Genetics, Tempus via Ambry Genetics, Variantyx and Rady Children's Hospital.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended September 30, 2026) revenue grew 5% to $123.1 million, but growth was carried by exome/genome volume (+25% to 32,134 tests) while cost of services rose 15% and SG&A rose 16% to $79.1 million, pushing the GAAP operating loss to $(10.4) million and net loss to $(12.3) million versus $(3.3) million and $(7.6) million a year earlier. Gross margin compressed (GAAP 69.9% vs 72.4%; adjusted 71.6% vs 73.8%) and non-GAAP adjusted net income fell to $8.6 million from $16.1 million. Nine-month operating cash flow swung to $(72.0) million used from $36.4 million provided, leaving $170.1 million of cash and available-for-sale securities at September 30, 2026, after $146.0 million of net Blackstone debt proceeds. Guidance is numeric: FY2026 revenue reiterated at $475-490 million, but exome/genome volume and revenue growth targets were trimmed and Q4 revenue is guided to $135 million.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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