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Exact Sciences Corporation (EXAS - Free Report) reported third-quarter earnings on Oct 27. The earnings results failed to impress investors as the stock lost 5.6% to close at $123.83 on Oct 30.
Exact Sciences incurred adjusted loss per share (adjusted for asset impairment costs) of 36 cents for third-quarter 2020 compared with adjusted loss of 31 cents in the year-ago period. However, the adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 51 cents per share.
GAAP loss per share for the third quarter was $1.46 compared to the year-ago loss of 31 cents per share.
Revenues in Detail
The third-quarter consolidated revenues (post the Genomic Health business integration) were $408.4 million, up 86.6% year over year. The metric exceeded the Zacks Consensus Estimate by 16.4%.
Screening revenues, which include laboratory service revenues from Cologuard and revenues from Biomatrica products, were $214.6 million, reflecting a year-over-year decrease of 2% due to the pandemic-led headwinds.
Precision Oncology revenues, which include laboratory service revenues from global Oncotype DX products, were $91.6 million. Revenues from COVID-19 testing were $102.2 million.
Exact Sciences Corporation Price, Consensus and EPS Surprise
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 88.2% to $313.3 million. Gross margin expanded 64 basis points (bps) to 76.7% despite an 81.6% surge in total cost.
Research and development expenses fell 9.3% year over year to $31.5 million. Sales and marketing expenses rose 58.3% to $136.5 million. General and administrative expenses increased 43.5% to $115.6 million year over year.
Adjusted operating expenses were $283.5 million in the third quarter, up 40.8% year over year. Adjusted operating income totaled $29.8 million compared with the year-ago operating loss of $34.9 million.
Financial Update
Exact Sciences exited the third quarter of 2020 with cash and cash equivalents, and marketable securities of $1.28 billion compared with $1.22 billion at the end of the second quarter.
Long term debt (excluding the current portion) in the third quarter is $22.6 million compared with $22.9 at the end of the second quarter.
Outlook
Exact Sciences noted that during the third quarter, the mammogram volumes had started to recover. The company expects this recovery to help drive revenues in the fourth quarter on a sequential basis. However, the company has not provided any guidance for the fourth quarter or the year.
Our Take
Exact Sciences exited the third quarter of 2020 with better-than-expected numbers. However, the quarterly loss per share was significantly wider than the year-ago figure. The company’s legacy Screening business saw a decline in revenues. The company’s rising expenses are a concern as well. The company not proving any financial outlook for the fourth quarter or the year raises apprehensions.
However, revenues from the COVID-19 tests conducted during the quarter contributed to the third-quarter top line. Robust top-line growth during the quarter, despite the pandemic-led headwinds, is impressive. Growth in Cologuard orders were modest year over year during the quarter but is significantly better than the prior quarter’s pace, thus raising optimism. Ongoing recovery in precision oncology business buoys optimism. Expansion in gross margin looks encouraging.
Zacks Rank and Stocks to Consider
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Align Technology, Inc. (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Exact Sciences (EXAS) Loses 5.6% Despite Beating Q3 Earnings
Exact Sciences Corporation (EXAS - Free Report) reported third-quarter earnings on Oct 27. The earnings results failed to impress investors as the stock lost 5.6% to close at $123.83 on Oct 30.
Exact Sciences incurred adjusted loss per share (adjusted for asset impairment costs) of 36 cents for third-quarter 2020 compared with adjusted loss of 31 cents in the year-ago period. However, the adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 51 cents per share.
GAAP loss per share for the third quarter was $1.46 compared to the year-ago loss of 31 cents per share.
Revenues in Detail
The third-quarter consolidated revenues (post the Genomic Health business integration) were $408.4 million, up 86.6% year over year. The metric exceeded the Zacks Consensus Estimate by 16.4%.
Screening revenues, which include laboratory service revenues from Cologuard and revenues from Biomatrica products, were $214.6 million, reflecting a year-over-year decrease of 2% due to the pandemic-led headwinds.
Precision Oncology revenues, which include laboratory service revenues from global Oncotype DX products, were $91.6 million. Revenues from COVID-19 testing were $102.2 million.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation price-consensus-eps-surprise-chart | Exact Sciences Corporation Quote
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 88.2% to $313.3 million. Gross margin expanded 64 basis points (bps) to 76.7% despite an 81.6% surge in total cost.
Research and development expenses fell 9.3% year over year to $31.5 million. Sales and marketing expenses rose 58.3% to $136.5 million. General and administrative expenses increased 43.5% to $115.6 million year over year.
Adjusted operating expenses were $283.5 million in the third quarter, up 40.8% year over year. Adjusted operating income totaled $29.8 million compared with the year-ago operating loss of $34.9 million.
Financial Update
Exact Sciences exited the third quarter of 2020 with cash and cash equivalents, and marketable securities of $1.28 billion compared with $1.22 billion at the end of the second quarter.
Long term debt (excluding the current portion) in the third quarter is $22.6 million compared with $22.9 at the end of the second quarter.
Outlook
Exact Sciences noted that during the third quarter, the mammogram volumes had started to recover. The company expects this recovery to help drive revenues in the fourth quarter on a sequential basis. However, the company has not provided any guidance for the fourth quarter or the year.
Our Take
Exact Sciences exited the third quarter of 2020 with better-than-expected numbers. However, the quarterly loss per share was significantly wider than the year-ago figure. The company’s legacy Screening business saw a decline in revenues. The company’s rising expenses are a concern as well. The company not proving any financial outlook for the fourth quarter or the year raises apprehensions.
However, revenues from the COVID-19 tests conducted during the quarter contributed to the third-quarter top line. Robust top-line growth during the quarter, despite the pandemic-led headwinds, is impressive. Growth in Cologuard orders were modest year over year during the quarter but is significantly better than the prior quarter’s pace, thus raising optimism. Ongoing recovery in precision oncology business buoys optimism. Expansion in gross margin looks encouraging.
Zacks Rank and Stocks to Consider
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Align Technology, Inc. (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>