FLGT Stock Price Falls Over 15% Pre-Market: Why It Happened

By Amit Chowdhry ● Aug 10, 2021
  • The stock price of Fulgent Genetics Inc (NASDAQ: FLGT) fell by over 15% pre-market. This is why it happened.

The stock price of Fulgent Genetics Inc (NASDAQ: FLGT) – a technology-based genetic testing company focused on transforming patient care in oncology, infectious and rare diseases, and reproductive health – fell by over 15% pre-market. Investors responded negatively to the company’s second-quarter financial results.

Q2 2021 Results:

— Revenue of $153.6 million, growing 790% year-over-year

— Billable tests delivered approximately 1.6 million, or 9 times the volume of second quarter of 2020

— Gross Margin improved approximately 21 percentage points year-over-year

— Core Revenue grew 296% year-over-year to $25.7 million

— GAAP income of $79.8 million, or $2.59 per share

— Non-GAAP income of $78.7 million, or $2.55 per share

— Adjusted EBITDA of $105 million

— Cash from operations of $76.1 million; Cash and investments of $777.0 million as of June 30, 2021

Outlook:

For the third quarter of 2021, Fulgent expects:

— Total Revenue in the range of $125 to $150 million, representing growth of 35% year over year at the midpoint

— Core Revenue of approximately $32 million, representing growth of 213% year over year

For the full year 2021, Fulgent expects:

— Total Revenue of approximately $800 million, representing growth of 90% year over year

— Core Revenue of approximately $110 million versus previous guidance of $100 million, representing growth of 201% year over year

— GAAP income of approximately $12.00 per share

— Non-GAAP income of approximately $12.50 per share

KEY QUOTES:

“The exciting announcements we have made today demonstrate our ability to execute on our strategic initiatives to expand our platform capabilities and reach in a post pandemic world. With the acquisition of CSI Laboratories and commercial agreement with Helio Health, we believe we are now well positioned to grow our presence in the molecular diagnostics and oncologic testing markets. In addition, through the incremental controlling investment in FF Gene Biotech in China we seek to further solidify our foothold in one of the fastest growing genetic testing markets in the world. While we are early in the process of integrating and ramping these investments, we are very excited to be able to offer an expanded menu of genomic testing solutions to our customers with the same precision, service and efficiency that Fulgent is known for. We believe the future is extremely bright for Fulgent as we build out additional ways to capitalize on the growing market for genetic testing across oncology, infectious and rare diseases, and reproductive health.”

— Ming Hsieh, Chairman and Chief Executive Officer

“We demonstrated strong growth in the second quarter with accelerating momentum in our Core NGS business, which grew 296% year over year. Although we fully anticipated a widespread slowdown in RT-PCR testing for COVID-19, vaccine administration materially decreased demand for testing in the second quarter faster than we expected. While we view rapid vaccine administration as a net positive for our country’s health and path to recovery, we are closely monitoring the proliferation of the delta variant and expect that ongoing testing will be an important part of fighting this surge. At the same time, we remain focused on opportunities beyond COVID testing as we leverage our strong cash position to make strategic investments in areas that enhance our core genomic testing capabilities, demonstrated this quarter by our acquisition of CSI Laboratories and investment in Helio Health. In addition, we believe the incremental investment in FF Gene Biotech strengthens our direct access to the Chinese genetic testing market, which will be additive to our revenue growth in the second half of the year. We are excited about the opportunities ahead and will be providing a formal update during our investment community conference call to shortly follow the issuance of this press release.”

— Paul Kim, Chief Financial Officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.