Phase Space AI

GeneDx Holdings

WGS · investment memo

Valuation margin
demonstrated − required CAGR
Required CAGR
27.0%
Demonstrated
40.0%
Terminal margin
12.3%
Exit multiple
3.4x
Company state
C
Terminal margin basis

DERIVED BY THIS BACKFILL, not memo-stated - the memo sets no terminal EBIT margin. Arithmetic uses only figures present in the memo: base-case FY2030 adjusted EBIT of $116.6m (SS4.2 FCF table, SBC charged as a real cost) over FY2030 revenue of ~$949m implied by the memo's own stated base-case FY2026-30 revenue CAGR of 17.3% off the $427.5m FY2025 base. 116.6 / 949.4 = 12.28%. APPROXIMATION FLAGGED: the memo's summary CAGR does not reproduce its tabulated FY2027 revenue exactly ($588m implied vs $562.5m tabulated), so treat this as +/-1pp. Constraint m_EBIT,T 12.3 <= m_gross,T 69.5 (base-case FY2027 adjusted gross margin) SATISFIED. ABOVE the trailing operating margin, which is negative, so the below-trailing error class does not apply.

Risk & exit

Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.

Risk trigger
19% below the memo price
$48.76
Forward E[R]
vs a 0% floor
+10.2%

A daily close below $48.76 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.

Thesis-invalidation conditions

Not stated. This name has no falsifiable invalidation conditions on file, so it cannot be risk-monitored. That is a gap in the research, not a clean bill of health — recorded rather than hidden.

Impairment case

Not stated. No permanent-loss case with a named cause is on file. A valuation bear case is not an impairment case.

Documents

WGS Catalyst Calendar WGS Financial Model Notes WGS Research WGS Trade Construction WGS Valuation