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Is EXAS Stock a Smart Addition to Your Portfolio Right Now?
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Exact Sciences Corporation (EXAS - Free Report) is making robust efforts to further promote Cologuard as the standard of care, building on its established reputation. The company’s progress across its pipeline is highly encouraging, with several new solutions expected to debut in the market in the coming months. On top of this, its sound financial health bodes well. Yet, cost pressures from macroeconomic challenges and excessive reliance on its lead brand raise concerns for Exact Sciences.
Meanwhile, surging costs from macroeconomic pressures and heavy dependence on the Cologuard test raise concerns.
In the past year, this Zacks Rank #1 (Strong Buy) stock has risen 2.3% compared with the 4.8% rise of the industry and the S&P 500 Composite’s gain of 33.9%.
The globally renowned medical device company has a market capitalization of $12.36 billion. It has a long-term earnings growth rate of 37.1% compared with the industry’s 21.5%. Additionally, the company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 56.2%.
Key Drivers for EXAS Stock
Cologuard’s Growth, A Strategic Priority: The Exact Sciences team is focused on further promoting Cologuard as the standard of care. Over the past decade, Cologuard has been at the forefront of colon cancer screening, and the momentum continued with more than one million people screened with Cologuard for the first time in the second quarter of 2024. The number of people eligible for the next Cologuard test is perceived to be growing by more than 10% sequentially, and the REIT screen success rate is also improving.
Currently, the team is focusing on three areas to enhance Cologuard growth. The first is to build the best and most effective commercial organization in healthcare by investing in the leadership team, training and sales force effectiveness. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years; and third, screening more people starting at the age of 45 to catch cancer earlier.
Advancing New Solutions: Exact Sciences is prioritizing high-return pipeline opportunities that can significantly impact patient care. In the 2024 second quarter, the team advanced its most impactful programs — colon cancer screening, molecular residual disease testing and multi-cancer screening. It plans to introduce several novel tests over the next 18 months that will change the way cancer is identified, tracked and managed, and also help the company rapidly expand.
Image Source: Zacks Investment Research
Having met all the endpoints in the pivotal BLUE-C study, the next-generation Cologuard Plus is expected to secure the FDA’s approval in the coming months. Exact Sciences signed an exclusive license to TwinStrand's cell-free nucleic acid sequencing technologies, strengthening its patent portfolio. Added to this, its multi-cancer screening test was recently authorized by the FDA for use in a real-world evidence study, while the new blood-based colon cancer screening test is expected to meet the Medicare requirements and also compete effectively. EXAS will introduce OncoLiquid — a blood-based therapy selection test from the Resolution Bioscience acquisition, to supplement the tissue-based OncoExTra service.
Favorable 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. Amid an overall tough macroeconomic scenario when the company is faced with a manufacturing and supply halt globally, this appears highly encouraging.
Factors Weighing on EXAS Stock
Escalating Costs: Exact Sciences has been grappling with escalated expenses for a while. Current geopolitical tensions in Europe or in the Middle East are affecting international trade and driving up the costs of raw material and labor and freight expenses. Added to this, the high-interest rate environment and limited access to capital markets can strain the company’s suppliers, distributors and key business partners, making it difficult for them to remain in business. All these are resulting in significant pressure on EXAS’ profitability.
Reliance on Cologuard Test: We believe Exact Sciences needs to sharpen its focus to drive broad-based growth for capturing around 1.75 million eligible patients in the U.S. market and 2.25 million patients internationally. The company’s ability to generate revenues will heavily rely on the commercial success of its Cologuard and Oncotype DX breast cancer tests for at least the next 12 months. If Exact Sciences cannot keep growing the sales of Cologuard and Oncotype DX breast cancer tests or if it is delayed or limited in doing so, it could negatively affect its business prospects, financial condition and results of operations.
EXAS Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2024 has remained constant at 95 cents.
The Zacks Consensus Estimate for the company’s 2024 revenues suggests a 13.3% year-over-year improvement to $2.83 billion.
TransMedix Group’s earnings are expected to surge 258.4% in 2024. Its shares have rallied 181.8% compared with the industry’s 22.9% growth in the past year. TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 13.6%. Shares of the company have surged 182.6% compared with the industry’s 22.9% growth in the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 96.5%.
Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 21% compared with the industry’s 12.5% growth. Shares of the company have rallied 63.7% compared with the industry’s 25.4% growth in the past year. PAHC’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 4.1%.
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Is EXAS Stock a Smart Addition to Your Portfolio Right Now?
Exact Sciences Corporation (EXAS - Free Report) is making robust efforts to further promote Cologuard as the standard of care, building on its established reputation. The company’s progress across its pipeline is highly encouraging, with several new solutions expected to debut in the market in the coming months. On top of this, its sound financial health bodes well. Yet, cost pressures from macroeconomic challenges and excessive reliance on its lead brand raise concerns for Exact Sciences.
Meanwhile, surging costs from macroeconomic pressures and heavy dependence on the Cologuard test raise concerns.
In the past year, this Zacks Rank #1 (Strong Buy) stock has risen 2.3% compared with the 4.8% rise of the industry and the S&P 500 Composite’s gain of 33.9%.
The globally renowned medical device company has a market capitalization of $12.36 billion. It has a long-term earnings growth rate of 37.1% compared with the industry’s 21.5%. Additionally, the company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 56.2%.
Key Drivers for EXAS Stock
Cologuard’s Growth, A Strategic Priority: The Exact Sciences team is focused on further promoting Cologuard as the standard of care. Over the past decade, Cologuard has been at the forefront of colon cancer screening, and the momentum continued with more than one million people screened with Cologuard for the first time in the second quarter of 2024. The number of people eligible for the next Cologuard test is perceived to be growing by more than 10% sequentially, and the REIT screen success rate is also improving.
Currently, the team is focusing on three areas to enhance Cologuard growth. The first is to build the best and most effective commercial organization in healthcare by investing in the leadership team, training and sales force effectiveness. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years; and third, screening more people starting at the age of 45 to catch cancer earlier.
Advancing New Solutions: Exact Sciences is prioritizing high-return pipeline opportunities that can significantly impact patient care. In the 2024 second quarter, the team advanced its most impactful programs — colon cancer screening, molecular residual disease testing and multi-cancer screening. It plans to introduce several novel tests over the next 18 months that will change the way cancer is identified, tracked and managed, and also help the company rapidly expand.
Image Source: Zacks Investment Research
Having met all the endpoints in the pivotal BLUE-C study, the next-generation Cologuard Plus is expected to secure the FDA’s approval in the coming months. Exact Sciences signed an exclusive license to TwinStrand's cell-free nucleic acid sequencing technologies, strengthening its patent portfolio. Added to this, its multi-cancer screening test was recently authorized by the FDA for use in a real-world evidence study, while the new blood-based colon cancer screening test is expected to meet the Medicare requirements and also compete effectively. EXAS will introduce OncoLiquid — a blood-based therapy selection test from the Resolution Bioscience acquisition, to supplement the tissue-based OncoExTra service.
Favorable 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. Amid an overall tough macroeconomic scenario when the company is faced with a manufacturing and supply halt globally, this appears highly encouraging.
Factors Weighing on EXAS Stock
Escalating Costs: Exact Sciences has been grappling with escalated expenses for a while. Current geopolitical tensions in Europe or in the Middle East are affecting international trade and driving up the costs of raw material and labor and freight expenses. Added to this, the high-interest rate environment and limited access to capital markets can strain the company’s suppliers, distributors and key business partners, making it difficult for them to remain in business. All these are resulting in significant pressure on EXAS’ profitability.
Reliance on Cologuard Test: We believe Exact Sciences needs to sharpen its focus to drive broad-based growth for capturing around 1.75 million eligible patients in the U.S. market and 2.25 million patients internationally. The company’s ability to generate revenues will heavily rely on the commercial success of its Cologuard and Oncotype DX breast cancer tests for at least the next 12 months. If Exact Sciences cannot keep growing the sales of Cologuard and Oncotype DX breast cancer tests or if it is delayed or limited in doing so, it could negatively affect its business prospects, financial condition and results of operations.
EXAS Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2024 has remained constant at 95 cents.
The Zacks Consensus Estimate for the company’s 2024 revenues suggests a 13.3% year-over-year improvement to $2.83 billion.
Other Top MedTech Picks
Some other top-ranked stocks in the broader medical space are TransMedix Group (TMDX - Free Report) , AxoGen (AXGN - Free Report) and Phibro Animal Health (PAHC - Free Report) . While TransMedix Group currently sports a Zacks Rank #1, AxoGen and Phibro Animal Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
TransMedix Group’s earnings are expected to surge 258.4% in 2024. Its shares have rallied 181.8% compared with the industry’s 22.9% growth in the past year. TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 13.6%. Shares of the company have surged 182.6% compared with the industry’s 22.9% growth in the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 96.5%.
Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 21% compared with the industry’s 12.5% growth. Shares of the company have rallied 63.7% compared with the industry’s 25.4% growth in the past year. PAHC’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 4.1%.