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Veracyte (VCYT - Free Report) delivered a diluted loss of 2 cents per share in the first quarter of 2024 compared with a loss of 11 cents per share in the year-ago period. The reported figure is also narrower than the Zacks Consensus Estimate of a loss of 19 cents per share.
Revenues
Revenues reported in the first quarter increased 17.5% year over year to $96.8 million. The metric exceeded the Zacks Consensus Estimate by 3.3%.
Quarterly Details
Testing revenues were $90.3 million in the reported quarter, up 24.7% year over year. This rise was mainly due to Decipher and Affirma volumes, along with ASP (Average Selling Price) growth, driven by payer contracting and prior period collection.
Product revenues fell 9.1% year over year to $3.5 million.
Biopharmaceutical and other revenues of $3.0 million reflected a 51% decrease compared to last year’s figure. This was mainly affected by the overall spending constraints across the industry.
Margins
The total cost of revenues (product, testing, biopharmaceutical and other) during the reported quarter was $31.5 million, up 20% year over year.
The gross profit rose 16.4% to $65.4 million. The gross margin contracted 66 basis points (bps) to 67.5% in the first quarter.
Selling and marketing expenses fell 9% to 23.8 million, while general and administrative expenses increased 24.5% to $26 million. R&D expenses totaled $16 million, up 25% year over year. The company delivered an operating loss of $0.57 million in the first quarter compared to an operating loss of $3.8 million during last year’s comparable period.
Cash, Capital Structure and Solvency
Veracyte exited the first quarter with cash and cash equivalents of $209.2 million compared with $216.5 million at the end of 2023. The cumulative net cash outflow from operating activities at the first quarter-end was $9 million compared with cash outflow of $2.2 million at the end of the first quarter of 2023.
Guidance
Vertacyte provided a revised financial outlook for 2024.
Revenues for 2024 are expected between $402 million and $410 million (earlier $394 million and $402 million). The Zacks Consensus Estimate presently stands at $399.1 million.
Our Take
Veracyte reported a lower-than-expected loss, with revenues surpassing estimates in the first quarter of 2024. The company had a strong start to 2024, driven by robust growth from its market-leading Decipher Prostate and Afirma tests. With Decipher Prostrate, Veracyte delivered a new quarterly volume record, with growth coming from both new and existing providers. The company expanded its minimal residual disease (MRD) testing capabilities during the quarter by completing the acquisition of C2i Genomics and initiated the development of the first MRD test using the novel, whole-genome approach.
Meanwhile, the decrease in product revenues was mainly due to the lower demand for Prosigna, which was affected by the supplier issues seen previously. The Biopharma business continued to be impacted by industry-wide spending constraints.
Zacks Rank and Key Picks
Veracyte currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace (MEDP - Free Report) , ResMed (RMD - Free Report) and Encompass Health Corporation (EHC - Free Report) .
Medpace, sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2024 EPS of $3.20, which beat the Zacks Consensus Estimate by 30.6%. Revenues of $511 million improved 17.7% from last year’s comparable figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry’s 12.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.
ResMed, sporting a Zacks Rank #1, reported a first-quarter 2024 EPS of $2.13, which topped the Zacks Consensus Estimate by 10.9%. Revenues of $1.20 billion surpassed the Zacks Consensus Estimate by 1.9%.
RMD has an estimated fiscal 2024 earnings growth rate of 17.9% compared to the industry’s 15.7%. In each of the trailing four quarters, the company delivered an average earnings surprise of 2.8%.
Encompass Health, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.
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Veracyte (VCYT) Reports Narrower Q1 Loss, Raises '24 Sales View
Veracyte (VCYT - Free Report) delivered a diluted loss of 2 cents per share in the first quarter of 2024 compared with a loss of 11 cents per share in the year-ago period. The reported figure is also narrower than the Zacks Consensus Estimate of a loss of 19 cents per share.
Revenues
Revenues reported in the first quarter increased 17.5% year over year to $96.8 million. The metric exceeded the Zacks Consensus Estimate by 3.3%.
Quarterly Details
Testing revenues were $90.3 million in the reported quarter, up 24.7% year over year. This rise was mainly due to Decipher and Affirma volumes, along with ASP (Average Selling Price) growth, driven by payer contracting and prior period collection.
Product revenues fell 9.1% year over year to $3.5 million.
Veracyte, Inc. Price, Consensus and EPS Surprise
Veracyte, Inc. price-consensus-eps-surprise-chart | Veracyte, Inc. Quote
Biopharmaceutical and other revenues of $3.0 million reflected a 51% decrease compared to last year’s figure. This was mainly affected by the overall spending constraints across the industry.
Margins
The total cost of revenues (product, testing, biopharmaceutical and other) during the reported quarter was $31.5 million, up 20% year over year.
The gross profit rose 16.4% to $65.4 million. The gross margin contracted 66 basis points (bps) to 67.5% in the first quarter.
Selling and marketing expenses fell 9% to 23.8 million, while general and administrative expenses increased 24.5% to $26 million. R&D expenses totaled $16 million, up 25% year over year. The company delivered an operating loss of $0.57 million in the first quarter compared to an operating loss of $3.8 million during last year’s comparable period.
Cash, Capital Structure and Solvency
Veracyte exited the first quarter with cash and cash equivalents of $209.2 million compared with $216.5 million at the end of 2023. The cumulative net cash outflow from operating activities at the first quarter-end was $9 million compared with cash outflow of $2.2 million at the end of the first quarter of 2023.
Guidance
Vertacyte provided a revised financial outlook for 2024.
Revenues for 2024 are expected between $402 million and $410 million (earlier $394 million and $402 million). The Zacks Consensus Estimate presently stands at $399.1 million.
Our Take
Veracyte reported a lower-than-expected loss, with revenues surpassing estimates in the first quarter of 2024. The company had a strong start to 2024, driven by robust growth from its market-leading Decipher Prostate and Afirma tests. With Decipher Prostrate, Veracyte delivered a new quarterly volume record, with growth coming from both new and existing providers. The company expanded its minimal residual disease (MRD) testing capabilities during the quarter by completing the acquisition of C2i Genomics and initiated the development of the first MRD test using the novel, whole-genome approach.
Meanwhile, the decrease in product revenues was mainly due to the lower demand for Prosigna, which was affected by the supplier issues seen previously. The Biopharma business continued to be impacted by industry-wide spending constraints.
Zacks Rank and Key Picks
Veracyte currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace (MEDP - Free Report) , ResMed (RMD - Free Report) and Encompass Health Corporation (EHC - Free Report) .
Medpace, sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2024 EPS of $3.20, which beat the Zacks Consensus Estimate by 30.6%. Revenues of $511 million improved 17.7% from last year’s comparable figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry’s 12.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.
ResMed, sporting a Zacks Rank #1, reported a first-quarter 2024 EPS of $2.13, which topped the Zacks Consensus Estimate by 10.9%. Revenues of $1.20 billion surpassed the Zacks Consensus Estimate by 1.9%.
RMD has an estimated fiscal 2024 earnings growth rate of 17.9% compared to the industry’s 15.7%. In each of the trailing four quarters, the company delivered an average earnings surprise of 2.8%.
Encompass Health, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.