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Invitae (NVTA) to Report Q3 Earnings: What's in the Cards?

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Invitae Corporation (NVTA - Free Report) is scheduled to report third-quarter 2020 results on Nov 5, after market close.

In the last-reported quarter, the company delivered a negative earnings surprise of 24.2%.

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 third quarter.

Lately, the company has been witnessing a rise in the number of oncology patients undergoing genetic testing. In the second quarter of 2020, the company accessioned more than 120000 samples for genetic testing, which reflected a strong year-over-year increase. The company also reported solid billable volume growth in the second quarter. This trend is expected to have continued in the third quarter of 2020.

Strong volume growth across all segments, particularly in reproductive tests and biopharma programs, is expected to have driven third-quarter results.

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 third-quarter results.

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 second quarter alone, the company added 16 new biopharma partnerships, reaching the total number of partners to more than 105. This is likely to have contributed to third-quarter revenues.

In June, the company signed a definitive agreement with ArcherDX to bring liquid biopsy, tissue profiling and cancer screening capabilities to Invitae's platform. This is expected to have driven third-quarter performance.

The company launched direct channel services in Canada for carrier screening in early pregnancy as well as cancer and cardiovascular disease testing in the second quarter. This development is also likely to reflect in third-quarter results.

Invitae Corporation Price and EPS Surprise


Invitae Corporation Price and EPS Surprise

Invitae Corporation price-eps-surprise | Invitae Corporation Quote

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

However, the trend of increasing operating expenses is likely to have impacted revenues in the to-be-reported quarter.

Q3 Estimates

The Zacks Consensus Estimate for total revenues of $61.5 million indicates growth of 8.8% from the prior-year quarter figure. Also, the consensus mark for loss stands at 60 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 -3.05%. 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 these have the right combination of elements to post an earnings beat in the to-be-reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zimmer Biomet Holdings (ZBH - Free Report) has an Earnings ESP of +4.10% and a Zacks Rank of 3.

Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +3.40% and a Zacks Rank of 2.

GW Pharmaceuticals (GWPH - Free Report) has an Earnings ESP of +9.65% and is a Zacks #3 Ranked stock.

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