Fulgent Genetics shares soar on Covid-19 testing

Fulgent Genetics surges after ‘record’ Q2 results

Shares of Fulgent Genetics (FLGT) have surged during Wednesday’s session after the company reported second quarter results after the market close last night.

The company noted that it had “record” figures for quarterly revenue, billable tests, adjusted earnings, and adjusted EBITDA, as it has commercially launched several tests for COVID-19 since March 2020.

EARNINGS

In its latest report, Fulgent Genetics reported Q2 adjusted EPS of 17c on revenue of $17.3M, compared to analysts’ estimates of (5c) and $10.05M.

The company delivered 180,513 billable tests in the quarter, an increase of 1003% year-over-year, and gross margin for the quarter improved roughly eight percentage points from the previous quarter and roughly 81% year-over-year.

Commenting on the results, chairman and CEO Ming Hsieh said, “The global COVID-19 pandemic has tested who we are as a company, and now more than ever we have demonstrated that Fulgent is a technology company with a proprietary platform built for massive scale.

Our technology is the cornerstone for all facets of our business, including cloud computing, pipeline services, record management, web portal services, clinical workflow, sequencing as a service and automated lab services.

Covid-19 Test Kit

Our second quarter results illustrate how we quickly applied our technology to the needs of today, organically developing and launching multiple tests to detect COVID-19 with Emergency Use Authorization from the FDA, including an at-home test offered through Picture Genetics, our patient-initiated product.

These offerings have attracted major new customer accounts, resulting in an inflection point in our business and outlook.”

GUIDANCE:

On Fulgent’s quarterly conference call, CFO Paul Kim said that based on the “explosive” demand the company is seeing from the market and the quality of its customers, he continues to see the upward trajectory and transformation of the business continuing for the balance of 2020.

Fulgent now projects test volumes for 2020 to be over 1.3M, which translates to into over $120M in revenues. Kim added that he sees adjusted net income of $25M, or about $1.00 per share in FY20.

Analysts had expected the company to report FY20 EPS of 12c on revenue of $45.02M.

Analysts Comments:

Following the results, Piper Sandler analyst Steven Mah maintained an Overweight rating on Fulgent Genetics and raised his price target on the stock to $68 from $31.

Mah, who continues to believe COVID-19 testing is durable for the coming years, said he is encouraged by Fulgent’s early success in test volume, adding that his higher revenue estimates are due to increased COVID-19 expectations.

PRICE ACTION:

In afternoon trading, Fulgent Genetics shares are up nearly 23%, trading at $36.46.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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