PRPO vs. NEO: Which Cancer Diagnostics Stock Is the Better Buy?

Specialty oncology diagnostics companies continue to operate in a dynamic healthcare environment, driven by advances in cancer diagnostics, precision medicine and increasing demand for specialized testing services. Against this backdrop, Precipio, Inc. PRPO and NeoGenomics, Inc. NEO are two companies focused on oncology diagnostics through laboratory testing and related diagnostic solutions. PRPO develops proprietary diagnostic products while also providing pathology testing services, whereas NEO offers oncology diagnostic testing and consultative laboratory services to healthcare providers and pharmaceutical customers.

While both companies operate in the oncology diagnostics industry, they differ in their business focus, service offerings and market presence. Precipio combines pathology services with the development and commercialization of proprietary diagnostic products, while NeoGenomics provides a broad portfolio of oncology testing services through an extensive laboratory network. These differences result in distinct business models, competitive positioning and financial profiles, ultimately shaping each company's investment appeal. This raises an important question: which stock is better positioned for investors today? Let's take a closer look.

Stock Performance & Valuation: PRPO vs. NEO

PRPO (down 10.8%) has underperformed NEO (up 73.7%) over the past three months. In the past year, Precipio has gained 77.8% compared with NeoGenomics’ gain of 115.8%.

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Meanwhile, PRPO is trading at a trailing 12-month enterprise value-to-sales (EV/S) ratio of 1.7X, above its median of 1.2X over the past five years. NEO’s trailing 12-month EV/S multiple sits at 2.3X, above its last five-year median of 2.2X. PRPO and NEO both appear to be cheap when compared with the Zacks Medical sector average of 2.7X.

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Factors Driving Precipio Stock

Precipio's integrated operating model is one of its key strengths. Unlike many diagnostics companies that separate research from commercial operations, the company combines its pathology services business with proprietary diagnostic product development. By leveraging its own clinical laboratories to identify diagnostic challenges, validate new products and support commercialization, PRPO aims to accelerate innovation while lowering development costs and reducing time to market. At the same time, its pathology business provides recurring revenues and operational stability to support long-term product development.

Commercial expansion remains a major growth catalyst. PRPO has invested in a dedicated commercial team to strengthen distributor relationships, expand customer outreach and build a broader pipeline for its proprietary products. Management indicated that these efforts are already generating qualified sales opportunities, with the focus now on converting them into recurring customers. As its commercial network expands and customer onboarding improves, Precipio expects to strengthen its revenue base over the long term.

PRPO's earnings profile also has the potential to improve as recent investments begin to deliver returns. Although first-quarter 2026 results were affected by reimbursement changes and shipment timing, management emphasized that these were largely temporary headwinds rather than signs of weakening demand. With its commercial infrastructure largely in place, higher revenues over time are expected to generate greater operating leverage, supporting margin expansion and stronger cash generation.

Factors Aiding NeoGenomics Stock

NeoGenomics is strengthening its position in precision oncology through a steady stream of product innovation. The company recently launched RaDaR ST for molecular residual disease (MRD) testing, introduced PanTracer Pro to simplify complex molecular testing workflows and secured MolDX coverage for PanTracer LBx. It also expanded its companion diagnostics portfolio with the FDA-approved PTEN IHC CDx for prostate cancer. These launches broaden NEO’s presence across the cancer care continuum while positioning it to capitalize on growing demand for precision oncology testing.

The company's commercial strategy remains another key growth driver. NeoGenomics continues to deepen its presence in the community oncology setting, where most cancer patients receive treatment, by expanding its sales force, strengthening customer relationships and enhancing its laboratory footprint through acquisitions such as Pathline. Backed by a broad test menu and established market position in hematology, NEO is steadily gaining market share and expanding its reach across oncology diagnostics.

NEO’s financial profile is also improving as its strategic investments begin to yield results. Strong clinical revenue growth, expanding operating leverage and improved profitability underscore the benefits of its portfolio and commercial initiatives. Reflecting confidence in continued execution, management raised its full-year revenue guidance, indicating that ongoing investments are expected to support sustainable long-term growth.

Choose NEO Over PRPO Now

Both Precipio and NeoGenomics are benefiting from the growing adoption of precision oncology and advanced cancer diagnostics, but their investment profiles differ. Precipio is focused on expanding its proprietary diagnostics portfolio while leveraging its integrated pathology services platform to drive commercialization and improve profitability. Although the company is making progress in strengthening its commercial infrastructure, its long-term growth remains dependent on scaling its relatively small product portfolio and translating investments into sustained financial improvement.

NeoGenomics, meanwhile, is capitalizing on its broad oncology diagnostics platform through continuous product innovation, commercial expansion and a growing presence in precision medicine. The company's diversified testing portfolio, established customer base and improving operating performance provide multiple avenues for long-term growth, while recent product launches and reimbursement wins further strengthen its competitive position.

From a valuation perspective, both stocks continue to trade at discounts to the broader sector, suggesting investors can gain exposure to the expanding oncology diagnostics market without paying a significant premium. However, both stocks are valued above their historical averages, indicating that the market has already begun pricing in expectations of continued business improvement and future growth.

Considering NeoGenomics' broader scale, diversified growth drivers, stronger commercial execution and improving financial profile, NEO appears to be the better buy for investors seeking exposure to the cancer diagnostics industry at present.

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This article originally published on Zacks Investment Research (zacks.com).

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