Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 94 cents per share in second-quarter 2022, narrower than the net loss of $1.03 per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.07.
Our model projected a net loss of $1.06 cents in the second quarter.
Revenues in Detail
Second-quarter consolidated revenues were $521.6 million, up 19.9% year over year. The metric exceeded the Zacks Consensus Estimate by 5%.
The second-quarter revenue compares to our own estimate of $495.6 million.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $353.9 million, reflecting a year-over-year increase of 34%. The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 9,000 new healthcare providers ordered Cologuard.
For the Screening segment, we projected $342 million of revenues in the second quarter.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $154 million, up 11.8% year over year.
For the Precision Oncology segment, we projected $147.4 million of revenues in the second quarter.
Revenues from COVID-19 testing totaled $13.8 million, down 58% year over year.
This figure compares to our COVID-19 testing estimate of $6.2 million for Q2.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 17.5% to $377 million. The gross margin contracted 151 basis points (bps) to 72.3%.
Research and development expenses contracted 0.1% year over year to $106.1 million. Sales and marketing expenses increased 10.8% to $215.9 million. General and administrative expenses rose 8.4% year over year to $181.7 million.
Adjusted operating expenses were $503.7 million in the second quarter, up 7.5% year over year. Adjusted operating loss totaled $126.6 million, narrower than the year-ago operating loss of $147.8 million.
Financial Update
Exact Sciences exited second-quarter 2022 with cash and cash equivalents and marketable securities of $728 million compared with $816.9 million at the end of the first quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of second-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $1,980-$2,022 million (compared to the earlier projected range of $1,985-$2,032 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.02 billion.
For 2022, the company has reaffirmed its Screening revenues expectation in the range of $1,350-$1,372 million. The company now expects Precision Oncology revenues in the range of $580-$590 million (earlier projection $595-$610 million). The company has also updated its outlook for COVID-19 testing revenues in the band of $50-$60 million (up from the prior projection of $40-$50).
Our Take
Exact Sciences exited the second quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period is encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the second-quarter top line. The impressive Cologuard volumes were driven by enhanced sales team productivity, marketing agreement with Katie Couric, three-year rescreens and increased usage in the 45-49 age group. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are added advantages.
On the flip side, the decline in COVID-19 sales hampered top-line growth. The company incurred an operating loss in the quarter under review, raising apprehension. Contraction in margins on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Other Key Picks
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merck & Co. (MRK - Free Report) .
Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has an earnings yield of 7.1% compared with the industry’s 3.2%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.
Medpace Holdings, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate by 8.9%. Revenues of $351.2 million outpaced the consensus mark by 1.3%.
Medpace Holdings has an estimated growth rate of 22.7% for full-year 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 17.3%.
Merck reported second-quarter 2022 adjusted earnings of $1.87 per share, beating the Zacks Consensus Estimate by 11.9%. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.
Merck has a long-term estimated growth rate of 10.1%. MRK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 16.8%.
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Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 94 cents per share in second-quarter 2022, narrower than the net loss of $1.03 per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.07.
Our model projected a net loss of $1.06 cents in the second quarter.
Revenues in Detail
Second-quarter consolidated revenues were $521.6 million, up 19.9% year over year. The metric exceeded the Zacks Consensus Estimate by 5%.
The second-quarter revenue compares to our own estimate of $495.6 million.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $353.9 million, reflecting a year-over-year increase of 34%. The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 9,000 new healthcare providers ordered Cologuard.
For the Screening segment, we projected $342 million of revenues in the second quarter.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $154 million, up 11.8% year over year.
For the Precision Oncology segment, we projected $147.4 million of revenues in the second quarter.
Revenues from COVID-19 testing totaled $13.8 million, down 58% year over year.
This figure compares to our COVID-19 testing estimate of $6.2 million for Q2.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 17.5% to $377 million. The gross margin contracted 151 basis points (bps) to 72.3%.
Research and development expenses contracted 0.1% year over year to $106.1 million. Sales and marketing expenses increased 10.8% to $215.9 million. General and administrative expenses rose 8.4% year over year to $181.7 million.
Adjusted operating expenses were $503.7 million in the second quarter, up 7.5% year over year. Adjusted operating loss totaled $126.6 million, narrower than the year-ago operating loss of $147.8 million.
Financial Update
Exact Sciences exited second-quarter 2022 with cash and cash equivalents and marketable securities of $728 million compared with $816.9 million at the end of the first quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of second-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $1,980-$2,022 million (compared to the earlier projected range of $1,985-$2,032 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.02 billion.
For 2022, the company has reaffirmed its Screening revenues expectation in the range of $1,350-$1,372 million. The company now expects Precision Oncology revenues in the range of $580-$590 million (earlier projection $595-$610 million). The company has also updated its outlook for COVID-19 testing revenues in the band of $50-$60 million (up from the prior projection of $40-$50).
Our Take
Exact Sciences exited the second quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period is encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the second-quarter top line. The impressive Cologuard volumes were driven by enhanced sales team productivity, marketing agreement with Katie Couric, three-year rescreens and increased usage in the 45-49 age group. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are added advantages.
On the flip side, the decline in COVID-19 sales hampered top-line growth. The company incurred an operating loss in the quarter under review, raising apprehension. Contraction in margins on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Other Key Picks
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merck & Co. (MRK - Free Report) .
Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has an earnings yield of 7.1% compared with the industry’s 3.2%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.
Medpace Holdings, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate by 8.9%. Revenues of $351.2 million outpaced the consensus mark by 1.3%.
Medpace Holdings has an estimated growth rate of 22.7% for full-year 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 17.3%.
Merck reported second-quarter 2022 adjusted earnings of $1.87 per share, beating the Zacks Consensus Estimate by 11.9%. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.
Merck has a long-term estimated growth rate of 10.1%. MRK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 16.8%.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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