Neogenomics (NEO) Trapped in a Tug-of-War: Legal Victory vs. Analyst Doubts as Options Volatility Soars

Summary
• Court rules in favor of Neogenomics in patent infringement lawsuit against Natera
• Q2 2025 earnings miss and revenue guidance cut send shares to 52-week lows
• Options chain shows 75%+ implied volatility on key October and November contracts
• RSI at 66.29 hints at overbought territory amid mixed technical signals

Neogenomics (NEO) is locked in a high-stakes battle between bullish catalysts and bearish fundamentals. A recent patent victory and liquid biopsy product launch have failed to offset Q2 earnings disappointment and analyst downgrades. With the stock trading flat at $9.10, traders are bracing for a volatile October expiration as options data reveals aggressive positioning on both sides of the trade.

Legal Win Fails to Offset Earnings Shockwave
The recent court ruling in Neogenomics' favor against Natera provided a temporary reprieve, but the stock's inability to sustain gains above $9.20 highlights deeper structural issues. The Q2 earnings report revealed a $0.09 EPS miss and a 9%-10% revenue growth outlook—far below pre-earnings estimates. Analysts at Morgan Stanley, BTIG, and Needham slashed price targets to $8.00, while the company's own PanTracer LBx launch failed to generate immediate revenue traction. This combination of operational underperformance and analyst skepticism has created a toxic mix for bulls.

Options Volatility as a Strategic Playbook
• 200-day MA: $9.55 (above) • RSI: 66.29 (overbought) • MACD: 0.354 (bullish) • Bollinger Bands: $9.03 (upper), $8.17 (middle) • Gamma: 0.386 (high sensitivity) • Theta: -0.036 (aggressive time decay)

Key levels to monitor include the 200-day MA at $9.55 and the Bollinger Band midpoint at $8.17. The RSI suggests overbought conditions, but the MACD remains bullish. Traders should consider short-term options strategies given the elevated volatility. Two standout contracts from the options chain are:

• NEO20251017C9 (Call, $9 strike, Oct 17 expiry): IV 75.24%, leverage 16.55%, delta 0.56, theta -0.036, gamma 0.317, turnover 380
• NEO20251121C9 (Call, $9 strike, Nov 21 expiry): IV 63.91%, leverage 10.11%, delta 0.57, theta -0.012, gamma 0.188, turnover 11,490

The October 17 call offers explosive potential with its 16.55% leverage ratio and high gamma, ideal for a short-term breakout play. The November 21 contract provides a more conservative approach with lower theta decay and higher liquidity. Under a 5% downside scenario (ST = $8.645), the October call would expire worthless, while the November call would see a 9.09% price drop. Aggressive bulls should prioritize the October contract for its high leverage, while cautious traders may prefer the November option for its liquidity and moderate decay.

Backtest Neogenomics Stock Performance
Here is the event-driven back-test you requested. We identified every trading day between 2022-01-01 and 2025-10-06 in which Neogenomics (NEO.O) closed at exactly the same price at which it opened (i.e., a 0 % intraday move). A total of 14 such events were found. We then measured NEO’s subsequent performance over the next 30 trading days for each event and compared it with the stock’s own benchmark trend.Key observations• Sample size: 14 events – this is a very small set, so statistical power is limited. • Average performance: cumulative returns remained negative for most of the post-event window; by day 18 the mean excess return reached –10.5 % and was the only point that achieved conventional statistical significance (negatively). • Win rate: never exceeded 38 % on any day in the test horizon. • Practical reading: a “flat-day” open-to-close pattern does not appear to be an attractive bullish signal for NEO during this period.Auto-assumed parameters1. Data frequency: daily intraday open vs. close (no true high-frequency ticks available in this environment). 2. Event definition: (Close – Open)/Open = 0.0 %; tolerance set to absolute equality. 3. Analysis window: 30 trading days post-event (standard event-study convention). 4. Benchmark: NEO’s own total-return series (i.e., we tested abnormal returns against the stock’s unconditional mean).To explore more actionable thresholds, you might consider re-running the test at ±2 % or ±3 % intraday moves where event counts – and possibly predictive power – are higher.You can inspect the full interactive report below.(Open the module to view the day-by-day return curves, win-rate heat-map and other event-study statistics.)

Nowhere to Hide: Neogenomics at a Crossroads
Neogenomics faces a critical juncture as its legal victories fail to translate into sustainable revenue growth. The options market's 75%+ implied volatility suggests traders expect a sharp directional move, but the stock's inability to break above $9.20 raises red flags. With Labcorp (LH) down -0.41% as the sector leader, healthcare investors should remain cautious. Immediate action: watch the $9.00 support level and consider short-term options strategies. If the stock breaks below $8.17, the November 20251121C9 call offers a leveraged play for a potential rebound.