GeneDx Holdings Corp. (NASDAQ:WGS) shares are rebounding as investors step back in after the genetic testing company’s sharp post-earnings sell-off earlier this week.

What Happened

The stock had plunged nearly 49% on May 5 after the company cut its full-year revenue guidance and reported weaker-than-expected quarterly results. However, Thursday’s rally appears driven by bargain hunting as some traders view the stock — now hovering near its 52-week lows — as oversold following the steep decline.

Investor sentiment also received a boost after ARK Investment Management disclosed purchases of GeneDx shares on May 5, signaling continued institutional interest despite the company’s lowered outlook.

While the reduced guidance pressured the stock earlier in the week, investors are now focusing on operational metrics that remained strong during the quarter.

GeneDx reported 34% year-over-year growth in exome and genome testing volume, while revenue from its core exome and genome business increased 27%, highlighting continued demand for its genetic testing services.

Earnings Snapshot

GeneDx reported first-quarter adjusted EPS loss of 28 cents, missing analyst estimates of a 1-cent loss, while revenue rose 17% year-over-year to $102.3 million, below estimates of $112.96 million.

The company lowered full-year 2026 revenue guidance to $475 million-$490 million, down from prior guidance of $540 million-$555 million, and below analyst estimates of $550.22 million.

GeneDx now expects exome and genome revenue growth of at least 20% and volume growth of at least 30%, down from prior expectations of 33%-35% growth for both.

Margins And Profitability

Adjusted gross margin remained flat at 69%, while adjusted net loss was $8.2 million versus adjusted net income of $9.2 million a year earlier.

GAAP net loss widened to $63.3 million from $6.5 million, including impairment and debt extinguishment charges.

Cash, cash equivalents, marketable securities, and restricted cash totaled $171.7 million at quarter-end.

CEO Commentary

CEO Katherine Stueland said, “GeneDx delivered 34% year-over-year volume growth in exome and genome testing in the first quarter – a clear signal that there’s sustained, strong demand for our services.”

“While our revenue did not reflect the full potential of what this business is capable of, we are adjusting our outlook and are poised to deliver more than 30% volume growth, 70% gross margin, and profitability on an adjusted basis for the year.”

The company also expanded Medicaid coverage in Texas, Maine, and Arkansas, launched a reflex genome testing product, and announced new research and biopharma partnerships focused on rare disease diagnostics and genomic medicine.

Short Interest Report

GeneDx short interest increased from 3.94 million shares to 3.96 million during the latest reporting period. About 26.61% of the company’s public float is currently sold short. Based on average trading volume, short sellers would need about 6.13 days to cover their positions.

Technical Analysis

The bigger-picture trend is still bearish: WGS is trading 36.8% below its 20-day SMA, 42.9% below its 50-day SMA, 56.5% below its 100-day SMA, and 63.6% below its 200-day SMA. Those gaps, plus the death cross that printed in February (50-day SMA below the 200-day SMA), keep the longer-term chart in "downtrend until proven otherwise" territory.

Momentum is the clearest tell right now, with RSI at 24.26—deeply oversold and consistent with a snapback-style rally rather than a confirmed trend reversal. RSI measures how stretched the recent move is, and readings below 30 often coincide with short-term bounces even when the primary trend remains down.

From a structure standpoint, the stock is trying to stabilize after setting a 52-week low in May, but it's still well below the March swing zones that typically act as overhead supply on rebounds. With the 12-month performance down 31.25% and price far under key moving averages, bulls generally need to see follow-through that reclaims at least the short-term averages before the rally looks durable.

  • Key Resistance: $60.71 — near the 20-day EMA, a common "first test" level in oversold rebounds
  • Key Support: $32.21 — the 52-week low zone from May, the nearest major downside reference

WGS Price Action: GeneDx Holdings shares were up 12.23% at $38.95 at the time of publication on Thursday. The stock is near its 52-week low of $32.21, according to Benzinga Pro data.

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