March 13, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of GenMark Diagnostics (NASDAQ: GNMK ) were returning positive results today, jumping as much as 13% after a strong earnings report.
So what: The development-stage molecular diagnostics company beat estimates on top and bottom lines with a revenue of $9.4 million, a 364% increase from the year before, and an EPS loss of $0.15 was better than the $0.21 loss analysts expected. CEO Hany Massarany noted that a strong flu season and the continued expansion of the company's installed base contributed to the better-than-expected quarter. Gross margin also dramatically improved to 50% from 20% in the same quarter a year ago.
Now what: Guidance for 2013 also beat estimates, as GenMark expects revenue to grow 70% to $35 million in the year. Analysts had expected just $30.6 million. The company also predicts its installed base of analyzers to grow by about 50%, or an additional 150 machines. Still, GenMark seems at least a few years from profitability, and it's hard to justify its current $400 million market cap. Shares have more than tripled in the past year, and it seems like it could be time to cool off.
Even if GenMark is popping today, macro trends will continue to affect the overall stock market. Warren Buffett referred to one trend as "the tapeworm that's eating at American competitiveness." Find out what it is in our free report: "What's Really Eating At America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.