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Exact Sciences (EXAS) Down 1.4% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Exact Sciences (EXAS - Free Report) . Shares have lost about 1.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Exact Sciences due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Exact Sciences Q1 Earnings Top Estimates, Margins Down

Exact Sciences Corporation reported first-quarter 2021 net loss of 18 cents, narrower than the net loss of 91 cents in the year-ago period. The quarter’s net loss was also narrower than the Zacks Consensus Estimate of a loss of $1.04.

Revenues in Detail

First-quarter consolidated revenues were $402.1 million, up 15.6% year over year. The metric exceeded the Zacks Consensus Estimate by 4.5%.

Segments in Detail

Screening revenues, which include laboratory service revenues from Cologuard and revenues from Biomatrica products, were $240.3 million, reflecting a year-over-year increase of 10%.

Precision Oncology revenues, which include laboratory service revenues from global Oncotype products, were $129.4 million. Revenues from COVID-19 testing totaled $32.3 million.

Margin

In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 9.7% to $292.1 million. However, gross margin contracted 389 basis points (bps) to 72.6% on a 34.7% surge in total cost.

Research and development expenses surged a stupendous 165.6% year over year to $115.7 million. Sales and marketing expenses rose 10.9% to $186.1 million. General and administrative expenses surged 135% to $267.7 million year over year.

Adjusted operating expenses were $569.4 million in the first quarter, up 75.1% year over year. Adjusted operating loss totaled $277.4 million, wider than the year-ago operating loss of $59 million.

Financial Update

Exact Sciences exited first-quarter 2021 with cash and cash equivalents, and marketable securities of $1.38 billion compared with $1.84 billion at the end of fourth-quarter 2020.

Long-term debt (excluding the current portion) at the end of first-quarter 2021 was $22 million compared with $22.3 million at the end of fourth-quarter 2020.

2021 Outlook

For 2021, the company has provided its financial outlook. The company expects revenue in the range of $1.69-$1.73 billion. The Zacks Consensus Estimate for the same is pegged at $1.74 billion.

For 2021, the company expects Screening revenues in the range of $1.12-$1.15 billion, Precision Oncology revenues in the range of $515-$525 million, and COVID-19 testing revenues in the band of $50-$60 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 13.7% due to these changes.

VGM Scores

At this time, Exact Sciences has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Exact Sciences has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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