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Why You Should Add Exact Sciences (EXAS) to Your Portfolio
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Exact Sciences Corporation’s (EXAS - Free Report) robust efforts to enhance Cologuard’s growth are poised to help it grow in the upcoming quarters. The company aims to introduce novel solutions that will revolutionize cancer detection and management, as well as boost its growth trajectory. Strong financial stability adds to the positive. Meanwhile, concerns remain over the adverse impact of macroeconomic pressures and intense competitive space.
Meanwhile, heavy dependence on the Cologuard test and operating in a highly competitive space are concerning for the company.
In the past year, this Zacks Rank #2 (Buy) stock has plunged 31.7% compared with the 5.6% decline of the industry. The S&P 500 Composite has risen 20.5% in the same time frame.
The renowned global medical device company has a market capitalization of $10.63 billion. The company has an expected earnings growth rate of 92% for 2025 compared with the industry’s 9.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 56.2%.
Let’s delve deeper.
Key Drivers
Strategic Priority Bodes Well: Exact Sciences team is focused on further promoting Cologuard as the standard of care and increasing the Oncotype DX adoption internationally. In the second quarter of 2024, screening revenues increased 15%, with more than 1 million people screened with Cologuard for the first time. Additionally, the number of people eligible for the next Cologuard test is growing by more than 10% sequentially, and the REIT screen success rate is also improving.
To enhance Cologuard’s growth, the company invests in building a strong commercial organization, simplifying the ordering process and beginning screening for people at age 45 to catch cancer earlier. Meanwhile, Oncotype DX drove Precision Oncology revenues with an impressive 31% international growth in the second quarter.
Image Source: Zacks Investment Research
Advancing New Solutions: Over the next 18 months, the company plans to introduce several novel tests that will revolutionize how cancer is identified, tracked, and managed while also contributing to the rapid expansion of Exact Sciences. The next-generation Cologuard Plus builds up anticipation for the FDA’s approval in the coming months, having met all the endpoints in the pivotal BLUE-C study. Furthermore, Exact Sciences bolstered its patent portfolio by signing an exclusive license to TwinStrand's cell-free nucleic acid sequencing technologies. Added to this, its multi-cancer screening test was recently authorized by the FDA for use in a real-world evidence study.
Meanwhile, the OncoDetect MRD test is set to significantly impact decision-making, supported by compelling study findings. EXAS will also introduce OncoLiquid, a blood-based therapy selection test from the Resolution Bioscience acquisition, to supplement the tissue-based OncoExTra service.
Strong Solvency: Exact Sciences exited the second quarter of 2024 with cash and cash equivalents and marketable securities of $530.2 million. In contrast, current debt stood lower at $249 million, reflecting a stable financial position. This also led to an improved current ratio of 2.17 from 1.64 at the end of the first quarter.
Downsides
Escalating Costs: Exact Sciences has been grappling with rising expenses from geopolitical challenges, high interest rates and supply-chain challenges, all creating significant pressure on the company’s profitability. In the second quarter of 2024, R&D expenses and sales and marketing expenses increased 16.1% and 4.9%, respectively, year over year.
Tough Competitive Landscape: Given the large market for colorectal cancer screening, Exact Sciences faces numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than the company. Under such intense market pressures, the company can potentially struggle with growth and profitability if unable to compete effectively, risking a decrease in its stock price.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2024 has improved from $1.09 to $1.00.
The Zacks Consensus Estimate for 2024 revenues is pegged at $2.83 billion, implying a 13.3% rise from the 2023 reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are TransMedix Group (TMDX - Free Report) , Boston Scientific (BSX - Free Report) and Myriad Genetics (MYGN - Free Report) .
TransMedix Group’s earnings are expected to surge 242.9% in 2024. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%. Its shares have soared 157.1% compared with the industry’s 7.2% rise in the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 17.1% compared with the industry’s 15.5%. Shares of the company have rallied 47% compared with the industry’s 6% rise over the past year.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Myriad Genetics, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 51.3% compared with the industry’s 21.4%. Shares of the company have soared 59.4% against the industry’s 4.1% fall over the past year.
MYGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 213.4%.
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Why You Should Add Exact Sciences (EXAS) to Your Portfolio
Exact Sciences Corporation’s (EXAS - Free Report) robust efforts to enhance Cologuard’s growth are poised to help it grow in the upcoming quarters. The company aims to introduce novel solutions that will revolutionize cancer detection and management, as well as boost its growth trajectory. Strong financial stability adds to the positive. Meanwhile, concerns remain over the adverse impact of macroeconomic pressures and intense competitive space.
Meanwhile, heavy dependence on the Cologuard test and operating in a highly competitive space are concerning for the company.
In the past year, this Zacks Rank #2 (Buy) stock has plunged 31.7% compared with the 5.6% decline of the industry. The S&P 500 Composite has risen 20.5% in the same time frame.
The renowned global medical device company has a market capitalization of $10.63 billion. The company has an expected earnings growth rate of 92% for 2025 compared with the industry’s 9.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 56.2%.
Let’s delve deeper.
Key Drivers
Strategic Priority Bodes Well: Exact Sciences team is focused on further promoting Cologuard as the standard of care and increasing the Oncotype DX adoption internationally. In the second quarter of 2024, screening revenues increased 15%, with more than 1 million people screened with Cologuard for the first time. Additionally, the number of people eligible for the next Cologuard test is growing by more than 10% sequentially, and the REIT screen success rate is also improving.
To enhance Cologuard’s growth, the company invests in building a strong commercial organization, simplifying the ordering process and beginning screening for people at age 45 to catch cancer earlier. Meanwhile, Oncotype DX drove Precision Oncology revenues with an impressive 31% international growth in the second quarter.
Image Source: Zacks Investment Research
Advancing New Solutions: Over the next 18 months, the company plans to introduce several novel tests that will revolutionize how cancer is identified, tracked, and managed while also contributing to the rapid expansion of Exact Sciences. The next-generation Cologuard Plus builds up anticipation for the FDA’s approval in the coming months, having met all the endpoints in the pivotal BLUE-C study. Furthermore, Exact Sciences bolstered its patent portfolio by signing an exclusive license to TwinStrand's cell-free nucleic acid sequencing technologies. Added to this, its multi-cancer screening test was recently authorized by the FDA for use in a real-world evidence study.
Meanwhile, the OncoDetect MRD test is set to significantly impact decision-making, supported by compelling study findings. EXAS will also introduce OncoLiquid, a blood-based therapy selection test from the Resolution Bioscience acquisition, to supplement the tissue-based OncoExTra service.
Strong Solvency: Exact Sciences exited the second quarter of 2024 with cash and cash equivalents and marketable securities of $530.2 million. In contrast, current debt stood lower at $249 million, reflecting a stable financial position. This also led to an improved current ratio of 2.17 from 1.64 at the end of the first quarter.
Downsides
Escalating Costs: Exact Sciences has been grappling with rising expenses from geopolitical challenges, high interest rates and supply-chain challenges, all creating significant pressure on the company’s profitability. In the second quarter of 2024, R&D expenses and sales and marketing expenses increased 16.1% and 4.9%, respectively, year over year.
Tough Competitive Landscape: Given the large market for colorectal cancer screening, Exact Sciences faces numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than the company. Under such intense market pressures, the company can potentially struggle with growth and profitability if unable to compete effectively, risking a decrease in its stock price.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2024 has improved from $1.09 to $1.00.
The Zacks Consensus Estimate for 2024 revenues is pegged at $2.83 billion, implying a 13.3% rise from the 2023 reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are TransMedix Group (TMDX - Free Report) , Boston Scientific (BSX - Free Report) and Myriad Genetics (MYGN - Free Report) .
TransMedix Group’s earnings are expected to surge 242.9% in 2024. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%. Its shares have soared 157.1% compared with the industry’s 7.2% rise in the past year.
TMDX sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 17.1% compared with the industry’s 15.5%. Shares of the company have rallied 47% compared with the industry’s 6% rise over the past year.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Myriad Genetics, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 51.3% compared with the industry’s 21.4%. Shares of the company have soared 59.4% against the industry’s 4.1% fall over the past year.
MYGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 213.4%.