Here’s Why NeoGenomics (NEO) Sold Off in Q1

Janus Henderson Investors, an investment management company, released its “Janus Henderson Venture Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned -8.61% in the first quarter, compared to the Russell 2000 Growth Index’s -11.12% return. Stock selection in the consumer discretionary sector contributed to the fund’s relative performance in the quarter, while selection in healthcare detracted. Stocks declined in the quarter as the uncertainty over tariffs and other Trump administration policies dampened the optimism that had driven momentum in the fourth quarter of 2024. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Janus Henderson Venture Fund highlighted stocks such as NeoGenomics, Inc. (NASDAQ:NEO). Headquartered in Fort Myers, Florida, NeoGenomics, Inc. (NASDAQ:NEO) is a network of clinical laboratories that focuses on cancer testing. The one-month return of NeoGenomics, Inc. (NASDAQ:NEO) was 0.41%, and its shares lost 46.03% of their value over the last 52 weeks. On July 1, 2025, NeoGenomics, Inc. (NASDAQ:NEO) stock closed at $7.41 per share, with a market capitalization of $953.63 million.

Janus Henderson Venture Fund stated the following regarding NeoGenomics, Inc. (NASDAQ:NEO) in its Q1 2025 investor letter:

“NeoGenomics, Inc. (NASDAQ:NEO) was a detractor in the healthcare sector. NeoGenomics provides diagnostic tests that help doctors and researchers target oncology treatments by isolating genetic markers that may distinguish different kinds of cancers. While the company continued to deliver double-digit top-line growth, the stock sold off on concerns over the planned departure of its well-regarded chief executive officer. However, the company has articulated an orderly succession plan, and we remain constructive on its execution and pursuit of higher margins.”

An oncologist in a hospital laboratory discussing the results of a clinical service test.

NeoGenomics, Inc. (NASDAQ:NEO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held NeoGenomics, Inc. (NASDAQ:NEO) at the end of the first quarter, which was 14 in the previous quarter. NeoGenomics, Inc. (NASDAQ:NEO) reported revenue of $168 million in the first quarter 2025, an increase of 8% over prior year. While we acknowledge the potential of NeoGenomics, Inc. (NASDAQ:NEO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of NEO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.