Genes are the foundation of human life. They are the code that gives every instruction to our bodies about how to move, digest and think. So understanding those genes can be critical to understanding our own health. It’s no wonder that the clinical sequencing market is expected to have a compound annual growth rate (CAGR) of 14.6% through 2032. With such growth comes profits, and some of the best biotech stocks to buy right now are already building the future of gene testing.

Ever since the human genome project was completed in 2003, gene testing companies have leveraged its success to bring genetic screening and personalized medicine to the masses. Gene testing can not only determine your susceptibility to a number of diseases and conditions but also tell you which drugs would best treat your conditions. This had led to a revolution in medicine, and it’s no accident that many high-growth health stocks of the past few decades have been involved with gene testing.

Modern gene testing companies are now serving more than just individual customers. They can also leverage their data to provide a better understanding of diseases and drug targets. This makes them key players in the pharmacology industry, as their data is worth big money to big pharma.

Add to that the continued growth of the gene testing industry as a whole and the future of gene testing looks bright. Here are three of the best gene testing stocks to play the trend.

23andMe (ME)

23andMe (NASDAQ:ME) started as and may be best known for its direct-to-consumer genetic kits. But the company has grown into so much more. The company has managed to bring its health and genomic data into drug partnerships as well.

In 2018, for example, 23andMe entered into a multiyear partnership with GSK PLC (NYSE:GSK). Under that agreement, GSK gained access to 23andMe’s data, which included not only the results of genetic tests sold to consumers but also health information provided by the consumers. This genetic and survey information allowed GSK to study and develop new drug targets.

That partnership is coming to an end, but there is room for new partnerships to take its place. 23andMe has a unique opportunity as its genetic and survey information brings more data to the table than genetic results alone. Biologically speaking, 23andMe has not only genotypic data but also phenotypic data from the survey information. And that is a powerful tool for understanding how our genes affect our health and our reactions to drugs. Both are important questions that biologists are still trying to answer.

In terms of financial outlook, 23andMe remains a speculative play. For fiscal 2023, which ended March 31, the company generated $300 million in revenue, up 10% from the year prior. However, it reported a net loss of $312 million, up from a $217 million loss in fiscal 2022.  And with cash and cash equivalents of just $387 million, 23andMe will likely need financing from debt or selling equity. So investors should be on the lookout for dilution.

That said, investors should also be on the lookout for new partnerships, which could provide an upside catalyst for shares. The combined information of 23andMe is a true godsend for researchers. And a path to profitability would make them one of the hottest biotech stocks to own.

Myriad Genetics

Myriad Genetics (NASDAQ:MYGN) is a leader in the field of genetic testing and personalized medicine. However, it is perhaps most famous for its 2013 legal setbacks. The company attempted to patent two human genes for use in cancer screening. But the Supreme Court ruled against its gene-patenting practices and broke its monopoly on certain cancer tests.

The company has rebounded strongly from these setbacks, though, and has continued on as a much more ethical leader in genetic testing and screening. For example, Myriad partnered with Illumina (NASDAQ:ILMN) to provide homologous recombination deficiency (HRD) testing, a crucial test in cancer treatment decision-making. It also partnered with The University of Texas MD Anderson Cancer Center in utilizing circulating tumor DNA to study metastatic cancers.

These partnerships and others are key to Myriad’s continued growth. By harnessing genetic insights and collaborations, Myriad has positioned itself to deliver improved patient outcomes. As our aging population requires ever more cancer screening and testing, this places Myriad as a leader in the future of gene testing.

Financially, Myriad is improving as well. On May 23, MYGN stock received a double upgrade from Goldman Sachs following the company’s latest earnings report. The analysts raised their rating on shares to “buy” from “sell” and upped their price target by $7 to $25, implying upside of 9% from the current level. The analysts also raised their growth forecasts for 2024 to 2025.

While Myriad posted a first-quarter net loss of $54 million, revenue increased by 10% year over year to $181.2 million. If the company can continue to grow revenue, it will have a path to profits and share price appreciation.

Illumina (ILMN)

In the world of gene testing stocks, Illumina (NASDAQ:ILMN) is the shovel salesman. The company provides the kits and instruments needed to perform modern gene testing. And its instruments provide longer reads of the genome, allowing greater coverage and potentially higher accuracy of the reads. The human genome isn’t read as a single long strand, it has to be broken up into smaller pieces that are read and put back together. Illumina’s longer reads simplify that process immensely compared to its competitors.

Yet, it hasn’t exactly been a smooth ride for the company or its shareholders in recent years.  In 2021, Illumina sought to acquire cancer detection company GRAIL. But it has since been ordered to divest from the acquisition by the Federal Trade Commission. Although former Chief Executives Officer (CEO) Francis deSouza continued to pursue the acquisition, he was strongly opposed by activist investor Carl Icahn.

Icahn seems to have won the fight, however, as deSouza is stepping down. And with the GRAIL/Icahn drama hopefully behind them, Illumina can move forward with its core business, buoyed by the continued rise of the genetic testing market.

Financially, Illumina’s most recent earnings report shows revenue of $1.1 billion and net income of $3 million, both of which decreased from a year ago. Whoever replaces deSouza will be doing so at a pivotal time, hoping to turn the ship around.

But this also presents a great opportunity for investors. Illumina’s products are some of the most trusted in industry and academia. If a new CEO can right the ship, then Illumina can once again take its place as one of the best gene testing stocks to buy.

On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.