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Is Fulgent Genetics a Good Healthcare Stock to Buy?

By Rachel Warren and Toby Bordelon – Dec 8, 2021 at 7:45AM

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Shares fell earlier in the November, but popped again after a robust third-quarter earnings report.

While it's natural to track share prices of your favorite stocks, it's important to remember that price alone never indicates a good or bad stock. Shares of Fulgent Genetics (FLGT -0.37%) are down nearly 18% over the past week 

This is despite the fact that the stock reported excellent third-quarter earnings on Nov. 9 with its core revenue up nearly 300% year over year and total revenue up 124% from the year-ago period. 

In this segment of Backstage Pass, recorded on Nov. 5, Fool contributors Toby Bordelon and Rachel Warren respond to a viewer's question about the stock and its volatile share price lately. 

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Toby Bordelon: We have another question that's got a lot of votes from Mike. He asked, Fulgent Genetics was down 10% today and he wants to know if that was due to the announcement of research data on the COVID pill from Pfizer (PFE 0.32%) which I guess came out today. Do you have any thoughts on this, Rachel? I know you follow the healthcare industry a little bit.

Rachel Warren: Yeah. I like Fulgent Genetics, I think they're a great company. I think it's possible. I was looking at, for example, Moderna (MRNA -0.91%) stock. Moderna was down about 17% today, which is a bit of a jump, but it's just one day.

I think that's very much possible, although just for context, shares of Fulgent have been falling a little bit recently. The company is strong, the business is strong, it rose to the forefront of investors' attention I think because of the variety of COVID-19 tests released.

But it does have a really robust portfolio of other tests that are contributing more and more to its overall revenue and driving really strong balance sheet growth. I think it could be a range of factors.

I think there's been an overall concern among some investors about a long-term need for some of these tests as you have more therapeutics introduced. Then of course with the news today from Pfizer. I would say just at first glance because I've been reading up about this, it's a combination of things.

But at the moment, it doesn't change my personal take on this company. I really like this company. I believe it reports its third-quarter earnings next week. I'll keep an eye on those to see what happens after that.

Rachel Warren has no position in any of the stocks mentioned. Toby Bordelon owns shares of Fulgent Genetics, Inc. and has the following options: short February 2022 $180 puts on Moderna Inc. The Motley Fool owns shares of and recommends Fulgent Genetics, Inc. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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