Exact Sciences Corp (NASDAQ:EXAS), a leading provider of cancer screening and diagnostic tests, stock rose 0.89% (As on October 11, 11:16:42 AM UTC-4, Source: Google Finance) after David Westenberg of Piper Sandler upgraded the rating for the company from Neutral to Overweight, while keeping the price target unchanged at $90. The pullback in the stock since July offers a “pretty compelling entry point,” given the strong Cologuard growth and “a clear path” to more than five years of maintaining growth rates above 10%, according to Piper Sandler.
The entire lab landscape has underperformed with interest rates being “higher for longer,” Westenberg said in the note. “Given the low penetration rate, we think Cologuard could sustain high growth, even with competitive entrance,” the analyst wrote.
“Incremental Cologuard margins have reached 75% (with the company targeting over 80%), meaning this company has the opportunity to drive the highest profitable growth in the industry,” Westenberg stated. Exact Sciences could reach an adjusted EBITDA of $518 million by in 2025, with upside to these estimates.
Moreover, the company will present late-breaking data on next-generation Cologuard® from the BLUE-C pivotal trial during the American College of Gastroenterology (ACG) Annual Meeting, taking place October 20-25, 2023, in Vancouver, Canada. Further evidence supporting both the cost-effectiveness of Cologuard and performance of next-generation Cologuard will also be presented at the annual meeting.
The company anticipates revenue of $2.441-$2.466 billion during 2023, assuming Screening revenue anticipated to be of $1.820-$1.835 billion, Precision Oncology revenue expects to be in the range of $615-$625 million, and COVID-19 testing revenue to be of $6 million.
For the second quarter of 2023, total revenue was $622.1 million, an increase of 19 percent, Core revenue was $617.5 million, an increase of 24 percent, Screening revenue was $462.8 million, an increase of 31 percent, Precision Oncology revenue was $157.2 million, an increase of 2 percent, or 7 percent on a core revenue basis and COVID-19 testing revenue was $2.1 million, a decrease of 84 percent. Net loss was $81.0 million, or $0.45 per share, compared to a net loss of $166.1 million, or $0.94 per share. EBITDA was $(21.7) million and adjusted EBITDA was $66.9 million. Cash provided by operating activities was $100.4 million and free cash flow was $65.7 million. Cash, cash equivalents, and marketable securities were $775.7 million at the end of the quarter.