Fulgent Genetics, Inc. FLGT is set to report first-quarter 2022 results on May 3, after market close.

In the last reported quarter, the company’s earnings of $3.34 surpassed the Zacks Consensus Estimate by 25.6%. Earnings surpassed estimates in three of the trailing four quarters and missed in one, the average beat being 59.3%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

Fulgent Genetics is likely to have gained from continued sales growth in the core NGS arm in the first quarter. In the last-reported fourth quarter of 2021, the core business registered 234% growth year over year. We anticipate the ongoing integration of CSI Laboratories to have a beneficial impact on the company’s core business in the to-be-reported quarter. The company has been continuously engaged in expanding of the sales team for CSI to fulfill its growth objectives. The growing footprint of the company’s China operations, following a joint venture, is also expected to have resulted in continued momentum across the core business.

Fulgent Genetics has been making significant progress with its strategic investment in Helio Health. In late 2021, the company noted the commercial availability of the HelioLiver liquid biopsy test in the United States. Per management, the HelioLiver test identifies early-stage hepatocellular carcinoma (HCC) with high accuracy. It has the potential to lower morbidity and mortality, as there are more curative treatment choices for HCC patients when the cancer is detected at an early stage. Meanwhile, in February 2022, Fulgent Genetics announced a strategic investment in Spatial Genomics, Inc. Under the terms of the deal, Fulgent Genetics will add Spatial Genomics’ sequential fluorescence in situ hybridization (seqFISH) technology and multiomics analysis platform to its suite of genomic testing solutions. We anticipate these developments to drive positive outcomes for the company’s core business in the to-be-reported quarter.

Fullgent Genetics Price and EPS Surprise

Fullgent Genetics price-eps-surprise | Fullgent Genetics Quote

In terms of COVID-19 NGS, the company recorded robust revenue growth in the fourth quarter owing to a surge in COVID-19 testing demand due to the emergence of the omicron variant. However, as the effects of the pandemic subside, we expect this demand to have gradually declined, impacting the first-quarter sales performance.

Despite the volatility surrounding COVID-19 testing, Fulgent Genetics’ COVID NGS test agreement with the Centers for Disease Control and Prevention (CDC) and strong relationships with organizations across the United States position it well to meet testing demand in case of future spikes.