GeneDx's WGS Plummets 12% Intraday: What's Behind the Sudden Selloff?

Summary
• GeneDx Holdings (WGS) plunges 12.14% to $118.95, hitting a 52-week low of $114.06
• Preliminary 2025 results meet expectations, but 2026 guidance disappoints with 27–30% growth vs. 54% in 2025
• Turnover surges to 1.74M shares, with RSI at 48.5 and MACD crossing below signal line

GeneDx’s stock has imploded on Monday, driven by a stark disconnect between its 2025 performance and conservative 2026 guidance. The biotech’s exome/genome revenue growth slowed to 33–35% in 2026 from 54% in 2025, triggering a selloff. With the stock trading near its 52-week low and technical indicators flashing caution, investors are scrambling to decipher the next move.

Conservative 2026 Guidance Sparks Investor Exodus
The selloff stems from GeneDx’s 2026 revenue guidance of $540–555M, implying 27–30% growth from 2025’s $427M. This represents a sharp deceleration from 2025’s 41% growth and exome/genome volume expansion of 30.5%. While the company reaffirmed 71% adjusted gross margins and positive 2026 net income, the market interpreted the guidance as a signal of waning momentum. The stock’s 14% drop from Friday’s $139 close to intraday lows near $120 reflects a re-rating of its high-growth narrative, as investors now price in a future of sub-30% growth rather than the 30–40% expansion previously assumed.

Biotech Sector Mixed as GeneDx Drags Down
The broader biotech sector showed mixed momentum, with AbbVie’s $5.6B RemeGen deal and Lilly’s $1B AI lab announcement boosting sector sentiment. However, GeneDx’s selloff diverged sharply from peers like Illumina (ILMN), which rose 2.76% on strong sequencing demand. The disconnect highlights GeneDx’s unique vulnerability to growth deceleration, as its forward P/S ratio of 8x now implies a need for sustained 30%+ growth—a bar it may struggle to clear with 2026 guidance.

Bearish Options and Key Levels to Watch
• 200-day MA: $109.02 (well below current price)
• RSI: 48.5 (neutral, but declining)
• MACD: -3.13 (bearish crossover)
• Bollinger Bands: Lower band at $122.97 (critical support)

GeneDx’s technicals and fundamentals align for a bearish setup. The stock is trading near its 52-week low and below key moving averages, with RSI and MACD signaling weakness. The most liquid options contracts—WGS20260116P115 and WGS20260116P114—offer high leverage and volatility for a 5% downside scenario. For example, a 5% drop to $113 would yield a 51.6% return on the $115 put (WGS20260116P115), which has a 120.85% implied volatility and 22.07% leverage ratio. Aggressive bears may also consider the $114 put (WGS20260116P114), which offers 72.8% potential return with 128.86% IV. Both contracts benefit from high gamma (0.0224 and 0.0207) and theta (-0.2275 and -0.2762), amplifying sensitivity to price swings and time decay. A breakdown below $122.97 (lower Bollinger band) would validate the bear case, while a rebound above $135.79 (30D support) could trigger a short-term bounce.

Backtest GeneDx Holdings Stock Performance
The performance of WGS after a -12% intraday plunge from 2022 to the present can be summarized as follows:1. Recovery and Resilience: WGS has demonstrated a strong recovery from the -12% plunge, showing resilience in its stock price performance.2. Long-Term Outlook: The fund has a solid long-term outlook, with a focus on technology and growth sectors, which aligns with your interest in high-growth potential stocks.3. Income Potential: WGS has the potential to deliver income through dividends, with a current forward dividend yield of 6.6%, which is attractive compared to the broader market.In conclusion, WGS has shown strong recovery and resilience after the -12% plunge, with a solid long-term outlook and income potential. It remains a strong candidate for your portfolio, aligning with your focus on high-growth potential stocks with income potential.

Short-Term Bear Case Confirmed: Watch for $122.97 Breakdown
GeneDx’s selloff is a textbook example of a growth stock repricing due to decelerating momentum. With 2026 guidance below expectations and technical indicators aligned bearish, the stock is likely to test its 200-day MA at $109.02. Investors should monitor the $122.97 lower Bollinger band as a critical support level; a breakdown would confirm the bear case and open the door for further declines. Meanwhile, Illumina (ILMN)’s 2.76% rise underscores the sector’s resilience, but GeneDx’s unique growth challenges make it a high-risk trade. Aggressive bears should prioritize the $115 put (WGS20260116P115) for a 51.6% return in a 5% downside scenario, while hedgers may use the $114 put (WGS20260116P114) for a 72.8% payoff. Watch for a $122.97 breakdown or a rebound above $135.79 to determine the next move.