GeneDx hit with securities class action after 49% stock collapse

GeneDx Holdings faces a securities class action lawsuit after its shares plunged 49% on May 5 following a Q1 earnings miss.

"The company misled investors about the Fabric Genomics acquisition and the deal's expected benefits," Hagens Berman, the law firm investigating the claims, said in a statement.

GeneDx on May 4 reported Q1 results that missed expectations across both its exome and genome sequencing lines. The company cut its 2026 revenue guidance to $475 million to $490 million, down from a prior range of $540 million to $555 million. It also disclosed a $31.3 million goodwill impairment charge tied to Fabric Genomics, which it had acquired for $36.5 million just one year earlier.

The stock closed at $67.93 on May 4 before falling $33.42 the next day, wiping out nearly half the company's market value. The lawsuit covers investors who purchased GeneDx shares between April 16, 2025 and May 4, 2026, with an Aug. 3 deadline to seek lead plaintiff status.

The complaint alleges GeneDx and its executives violated federal securities laws by overstating the importance of Fabric Genomics to the company's business and the durability of its average reimbursement rates. The company's average reimbursement rate came in at $3,300 during the quarter, about $200 below expectations, according to the earnings call.

GeneDx's gross margins suffered as a result of the acquisition, the lawsuit claims, making the company's positive statements about its business outlook materially false and misleading.

The class action adds legal risk to a stock already under pressure from the guidance cut and impairment charge. Investors will watch for additional law firms to file competing suits ahead of the lead plaintiff deadline.

This article is for informational purposes only and does not constitute investment advice.