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Invitae (NVTA) to Report Q2 Earnings: What's in the Cards?

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Invitae Corporation is scheduled to report second-quarter 2020 results on Aug 4, after market close.

In the last-reported quarter, the company delivered an earnings surprise of 4.8%.

Let’s take a look at how things are shaping up prior to this announcement.

Factors to Note

Over the last few quarters, genetic testing, one of Invitae’s key business segments, has been consistently delivering robust results, a trend which is likely to have continued in the second quarter.

Lately, the company has been witnessing a rise in the number of oncology patients undergoing genetic testing. In the first quarter of 2020, the company accessioned more than 154000 samples for genetic testing, which reflected a strong year-over-year increase. The company also reported solid billable volume growth in the first quarter. This trend is expected to have continued in the second quarter of 2020.

Strong volume growth across all segments, particularly in reproductive tests and biopharma programs, is expected to have positively impacted second-quarter performance.

The company’s non-invasive prenatal screening (NIPS) using maternal cell-free DNA has been strengthening its portfolio of comprehensive women's health genetic testing services lately. This is expected to show on second-quarter results.

Invitae Corporation Price and EPS Surprise

 

Invitae Corporation Price and EPS Surprise

Invitae Corporation price-eps-surprise | Invitae Corporation Quote

Per management, Invitae is focused on investing in widening its genome network and signing biopharma partnerships, thereby strengthening the capabilities of the platform within this network. In the first quarter alone, the company added 12 new biopharma partnerships, reaching the total number of partners to more than 90.

In 2019, the company expanded its Behind the Seizure program with BioMarin by partnering with two additional companies — Stoke Therapeutics and Xenon Pharmaceuticals. The continued expansion of its bio-pharma partnerships, including those of Detect, Spark and the Behind the Seizure program, are likely to have contributed to the top line in the second quarter.

Invitae’s acquisitions of YouScript and Genelex, closed in March 2020, are expected to have strengthened Invitae’s position in the pharmacogenomics market in the second quarter.

However, the trend of increasing operating expenses is likely to have impacted revenues in the to-be-reported quarter. Also, with the entire second quarter bearing the brunt of the COVID-19 pandemic, the company’s performance is likely to have been impacted primarily in terms of volume growth.

Q2 Estimates

The Zacks Consensus Estimate for total revenues of $39.8 million indicates a fall of 25.5% from the prior-year quarter figure. Also, the consensus mark for loss stands at 62 cents.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases chances of an earnings beat. That is not the case here as you will see.

Earnings ESP: Invitae has an Earnings ESP of -6.80%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: It carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter

Integra LifeSciences Holdings Corporation (IART - Free Report) has an Earnings ESP of +20.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +6.69% and a Zacks Rank of 2.

Hologic, Inc. (HOLX - Free Report) has an Earnings ESP of +14.56% and a Zacks Rank of 3.

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