Please ensure Javascript is enabled for purposes of website accessibility

Why GenMark Diagnostics Stock Is Falling Today

By Keith Speights - Mar 6, 2020 at 11:43AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors appear to be taking profits after the stock soared earlier this week on news that the company began shipping its coronavirus test kits.

What happened

Shares of GenMark Diagnostics (GNMK) were falling 12.7% lower as of 11:20 a.m. EST on Friday. This drop might be surprising, since the company didn't report any news and stands to benefit as the novel coronavirus outbreak drives sales for its coronavirus test kits. But it appears that investors are taking profits off the table after GenMark's shares soared earlier this week.

So what

Today's nosedive really doesn't mean much in the big scheme of things. What does matter? GenMark's business prospects.

Those prospects are certainly better now that GenMark has begun shipping its ePlex test kits, which are designed to test the novel coronavirus that causes COVID-19. For now, though, the test kits are available for research use only.

Gloved hand holding a vial with a label that has 'coronavirus' printed on it.

Image source: Getty Images.

It's important to remember, too, that GenMark has competition. Co-Diagnostics also has a novel coronavirus test. Danaher subsidiary Integrated DNA Technologies makes the test kits for the Centers for Disease Control and Prevention. Quest Diagnostics announced this week that it plans to launch a coronavirus testing service, as well. 

Still, it seems likely that GenMark will enjoy a sales boost from its new coronavirus test. The big unanswered question is just how big that boost will be.

Now what

GenMark's ePlex molecular diagnostics platform is already achieving commercial success. The company recently reported that sales for ePlex in the fourth quarter jumped 59% year over year to $60.3 million, generating more than two-thirds of total revenue in the quarter. GenMark's next quarterly update will almost certainly be even better. 

However, look for the healthcare stock to remain quite volatile for a while. GenMark's shares could swing up and down based on the headlines related to the coronavirus outbreak. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GenMark Diagnostics, Inc. Stock Quote
GenMark Diagnostics, Inc.
GNMK
Danaher Corporation Stock Quote
Danaher Corporation
DHR
$252.63 (-0.35%) $0.89
Quest Diagnostics Incorporated Stock Quote
Quest Diagnostics Incorporated
DGX
$134.47 (1.12%) $1.49
Co-Diagnostics, Inc. Stock Quote
Co-Diagnostics, Inc.
CODX
$5.84 (4.10%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.