What Happened?
Shares of oncology (cancer) diagnostics company NeoGenomics (NASDAQ: NEO) jumped 4.8% in the afternoon session after news of a significant insider purchase by a key executive. The move followed the disclosure of an insider purchase by Jeffrey Sherman, the Chief Financial Officer of a company subsidiary. Sherman acquired 20,000 shares, a transaction often interpreted by investors as a strong signal of confidence in a company's prospects. This positive development appeared to outweigh the more cautious sentiment from Wall Street, where a consensus of analysts rated the stock as a "Hold." Investors seemingly focused on the executive's bullish action rather than recent negative headlines, including a law firm's investigation into the company's prior financial reporting.
After the initial pop the shares cooled down to $5.66, up 3% from previous close.
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What Is The Market Telling Us
NeoGenomics’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 20.2% on the news that the company reported second-quarter results that included a significant cut to its full-year financial guidance, sparking a selloff. Although the company posted a 10% year-over-year revenue increase to $181.3 million, this figure fell just short of Wall Street's expectations. The primary concern for investors appeared to be the company's lowered outlook for the full year. NeoGenomics reduced its 2025 revenue forecast to a range of $720-$726 million, down from a previous estimate of approximately $753 million. Furthermore, the company slashed its adjusted EBITDA projections to $41-$44 million from a prior range of $55-$58 million. The company also reported a net loss of $45.1 million for the quarter. This revised forecast overshadowed the quarterly revenue growth, signaling to investors potential challenges ahead in the company's growth and profitability plans.
NeoGenomics is down 65.7% since the beginning of the year, and at $5.66 per share, it is trading 69.6% below its 52-week high of $18.61 from January 2025. Investors who bought $1,000 worth of NeoGenomics’s shares 5 years ago would now be looking at an investment worth $142.70.
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