Genoptix, Inc. (GXDX) continues to pressure its 52-week high as shares ride a trend line that began this summer higher. The company’s better than expected third-quarter results, reported on Nov 5, also helped fuel optimism.

Company Description

Genoptix, Inc. provides specialized laboratory services focusing on diagnostics in the United States. The company was founded in 1999 and has a market cap of $644 million.

Third-Quarter Results

Sales were up 58% from last year to $50.8 million. Earnings also came in strong at 53 cents per share, 19 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 13 cents, or 46%.

The company benefited from margin expansion and operational efficiencies, with gross margin gaining 2% to 64%. Operating income came in at 32% of revenue, up 5% from last year.

Estimates Up

Estimates jumped higher after the good quarter, with the current year adding 15 cents to $1.62. The next-year estimate is pegged at $1.88, a 16% growth projection.

Valuation

Based on the current-year estimate, this stock has a forward P/E of 23X, a premium to the overall market.

The Chart

Shares of GXDX have been riding a very smooth trend line higher for most of the last 6 months, posting a number of new highs in the process. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

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