Neogenomics Plunges 20.9%—What’s Fueling This Volatility?

Summary
• Neogenomics (NEO) tumbles 20.9% to $5.11, its lowest since 2023, amid Q2 earnings and guidance revisions
• Clinical revenue grew 16% but pharma revenue pressures and $20M impairment charges weighed heavily
• Bollinger Bands and RSI signal oversold conditions, while options activity surges with 20 contracts traded

The stock’s sharp intraday drop of 20.9%—from a high of $5.64 to a low of $4.805—has triggered a frenzy of options activity and technical indicators pointing to a potential rebound. This volatility follows mixed Q2 results: clinical growth outperformed but pharma revenue delays and asset impairments dented investor confidence. With the stock near its 52-week low, the question looms: is this a buying opportunity or a deeper selloff in the making?

Q2 Earnings Miss and Guidance Dampen Investor Sentiment
Neogenomics’ 20.9% plunge stems from a Q2 earnings report that highlighted structural challenges. While clinical revenue grew 16% driven by NGS (23% growth) and Pathline acquisition, pharma revenue fell short of expectations due to delayed PanTracer Liquid Biopsy launches. The $20M impairment charges from Trapelo and InVisionFirst®-Lung intangible assets further eroded profitability, widening net losses to $45M. CEO Tony Zook’s admission of unmet pharma revenue assumptions and revised $723M full-year guidance (down from $753M) triggered a sell-off. The market’s reaction underscores skepticism about NeoGenomics’ ability to offset clinical growth with pharma recovery.

Health Care Services Sector Mixed as Labcorp (LH) Underperforms
The Health Care Services sector, which includes diagnostic and lab services providers, showed divergent performance. Labcorp (LH), a key peer, fell 0.59% intraday, contrasting with NeoGenomics’ sharper decline. While NeoGenomics’ struggles reflect sector-specific challenges like pharma revenue volatility, Labcorp’s stable pricing and diversified client base provided a buffer. The broader sector’s 0.5% decline suggests market caution, but NeoGenomics’ 20.9% drop highlights its unique exposure to R&D delays and asset write-downs.

Options and ETFs for Navigating Volatility: A Tactical Playbook
• 200-day average: 11.53 (well above) • RSI: 28.57 (oversold) • MACD: -0.28 (bearish) • Bollinger Bands: $5.98–$7.93 (near lower band)
The technical landscape suggests a short-term oversold condition, but long-term bearish trends persist. For traders, the key levels to watch are the 200-day SMA at $11.53 (resistance) and the Bollinger lower band at $5.98 (support). A break below $5.98 could trigger further declines, while a rebound above $7.00 may signal stabilization. The iShares Healthcare ETF (XLV) offers broad exposure, but its 0.3% intraday dip mirrors sector caution.
Top Options:
• NEO20250815P5 (Put, $5 strike, Aug 15 expiration)
- IV: 74.96% (high volatility)
- Leverage: 19% (moderate)
- Delta: -0.40 (moderate sensitivity)
- Theta: -0.0035 (slow decay)
- Gamma: 0.45 (high sensitivity to price swings)
- Turnover: 193 shares (liquid)
- Payoff: $0.06/share at 5% downside to $4.85
This put option is ideal for aggressive bearish bets, leveraging high gamma and volatility to capitalize on a potential breakdown below $5.00.
• NEO20251219P5 (Put, $5 strike, Dec 19 expiration)
- IV: 60.22% (moderate)
- Leverage: 7.89% (low)
- Delta: -0.38 (moderate)
- Theta: -0.0018 (slow decay)
- Gamma: 0.196 (moderate sensitivity)
- Turnover: 642 shares (liquid)
- Payoff: $0.16/share at 5% downside to $4.85
This longer-dated put balances time decay and gamma, offering a safer play on a potential 2025 selloff.
Action Insight: Aggressive bears should prioritize NEO20250815P5 for short-term volatility, while NEO20251219P5 suits those anticipating a prolonged downturn.

Backtest Neogenomics Stock Performance
The backtest of NEO's performance after a -21% intraday plunge shows mixed results. While the 3-day win rate is 47.64%, the 10-day win rate is slightly lower at 47.47%, and the 30-day win rate is 46.63%. This indicates that NEO tends to recover moderately in the short term, with a maximum return of 0.83% observed over 30 days.

Rebound or Reckoning? Key Levels to Watch in the Next 72 Hours
The 20.9% drop has pushed NeoGenomics into oversold territory, but structural challenges—pharma delays and asset impairments—remain unresolved. Immediate support at $5.98 and resistance at $7.00 will dictate near-term direction. Investors should monitor the 200-day SMA at $11.53 as a long-term benchmark. Watch for a breakdown below $5.98 to confirm bearish momentum, while a rebound above $7.00 could signal a short-covering rally. For context, sector leader Labcorp (LH) fell 0.59%, indicating broader caution. Takeaway: Short-term traders should focus on the $5.00 strike options, while long-term investors need to see improved pharma revenue guidance before reentering.