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Exact Sciences (EXAS) Q3 Earnings Top Estimates, Margin Falls
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Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 84 cents per share for third-quarter 2022, narrower than the net loss of 97 cents per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.10.
Revenues in Detail
Third-quarter consolidated revenues were $523.1 million, up 14.6% year over year. The metric exceeded the Zacks Consensus Estimate by 4.5%.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $360.8 million, reflecting a year-over-year increase of 29% (up 25% excluding the PreventionGenetics acquisition).
The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 10,000 new healthcare providers ordered Cologuard.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $151.4 million, up 4% year over year (up 9% excluding the Oncotype DX Genomic Prostate Score test that was divested on Aug 2, 2022, and the impact of foreign exchange rates).
Revenues from COVID-19 testing totaled $10.9 million, down 64% year over year.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 10.1% to $375.1 million. However, the gross margin contracted 292 basis points (bps) to 71.7%.
Research and development expenses rose 20.5% year over year to $90.8 million. Sales and marketing expenses fell 4.5% to $187.7 million. General and administrative expenses rose 2.9% year over year to $191.9 million.
Adjusted operating expenses were $470.5 million in the third quarter, up 2.6% year over year. Adjusted operating loss totaled $95.3 million, narrower than the year-ago operating loss of $117.9 million.
Financial Update
Exact Sciences exited third-quarter 2022 with cash and cash equivalents and marketable securities of $669.1 million compared with $728 million at the end of the second quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of third-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $2,025-$2,042 million (up from the earlier projected range of $1,980-$2,022 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.01 billion.
For 2022, the company raised its Screening revenues expectation to the range of $1,375-$1,382 million (from the earlier range of $1,350-$1,372 million). The company now expects Precision Oncology revenues in the range of $590-$600 million (earlier projection was $580-$590 million). The company narrowed its outlook for COVID-19 testing revenues to the band of $55-$60 million (from the prior projection of $50-$60).
Our Take
Exact Sciences exited the third quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period was encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the third-quarter top line. The company noted that more than 292,000 healthcare providers ordered Cologuard from its launch till the end of September. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are major 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 gross margin on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Key Picks
Exact Sciences currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Exact Sciences (EXAS) Q3 Earnings Top Estimates, Margin Falls
Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 84 cents per share for third-quarter 2022, narrower than the net loss of 97 cents per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.10.
Revenues in Detail
Third-quarter consolidated revenues were $523.1 million, up 14.6% year over year. The metric exceeded the Zacks Consensus Estimate by 4.5%.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $360.8 million, reflecting a year-over-year increase of 29% (up 25% excluding the PreventionGenetics acquisition).
The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 10,000 new healthcare providers ordered Cologuard.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation price-consensus-eps-surprise-chart | Exact Sciences Corporation Quote
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $151.4 million, up 4% year over year (up 9% excluding the Oncotype DX Genomic Prostate Score test that was divested on Aug 2, 2022, and the impact of foreign exchange rates).
Revenues from COVID-19 testing totaled $10.9 million, down 64% year over year.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 10.1% to $375.1 million. However, the gross margin contracted 292 basis points (bps) to 71.7%.
Research and development expenses rose 20.5% year over year to $90.8 million. Sales and marketing expenses fell 4.5% to $187.7 million. General and administrative expenses rose 2.9% year over year to $191.9 million.
Adjusted operating expenses were $470.5 million in the third quarter, up 2.6% year over year. Adjusted operating loss totaled $95.3 million, narrower than the year-ago operating loss of $117.9 million.
Financial Update
Exact Sciences exited third-quarter 2022 with cash and cash equivalents and marketable securities of $669.1 million compared with $728 million at the end of the second quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of third-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $2,025-$2,042 million (up from the earlier projected range of $1,980-$2,022 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.01 billion.
For 2022, the company raised its Screening revenues expectation to the range of $1,375-$1,382 million (from the earlier range of $1,350-$1,372 million). The company now expects Precision Oncology revenues in the range of $590-$600 million (earlier projection was $580-$590 million). The company narrowed its outlook for COVID-19 testing revenues to the band of $55-$60 million (from the prior projection of $50-$60).
Our Take
Exact Sciences exited the third quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period was encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the third-quarter top line. The company noted that more than 292,000 healthcare providers ordered Cologuard from its launch till the end of September. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are major 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 gross margin on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Key Picks
Exact Sciences currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.