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Here's Why You Should Buy Exact Sciences (EXAS) Stock Now
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Exact Sciences Corporation (EXAS - Free Report) is well poised for growth in the coming quarters, led by strong Cologuard growth. The raised 2023 guidance is a major upside. However, mounting expenses and stiff competition do not bode well.
In the past year, this Zacks Rank #2 (Buy) stock has surged 88.5% against a 9.7% decline of the industry and a 18% rise of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $16.84 billion. The company’s next-year expected growth rate of 36.2% compares favorably with the industry’s growth projection of 10%.
Let’s delve deeper.
Key Drivers
Q1 Upsides: Exact Sciences exited the first quarter of 2023 with better-than-expected results. The quarterly loss narrowed significantly from the year-ago period’s levels. Robust revenues from the Screening and Precision Oncology segments contributed to first-quarter top line. During the quarter, 10,000 new healthcare professionals ordered Cologuard, bringing the total to over 312,000. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are major advantages. The raised 2023 guidance is another upside.
Enhancing Cologuard Growth: The company is currently focusing on three areas to enhance Cologuard growth. Building the best and most effective commercial organization in healthcare by investing in the leadership team, training, and sales force effectiveness is the first strategy. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years. Screening more people starting at age 45 to catch cancer earlier is the final strategy.
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Per the first-quarter earnings update, the company recently ran next-generation Cologuard on nearly 7,700 blinded DeeP-C samples. The second prospective study will provide valuable evidence supporting next-generation Cologuard's clinical value and competitively unique position. In multi-cancer early detection, it plans to share two additional sets of case-control data this year, validating the comprehensive multi-marker class approach.
Raised Guidance: The company raised its 2023 revenue guidance to the range of $2.380-$2.420 billion (from the earlier guidance of $2.265-$2.315 billion). The Zacks Consensus Estimate for the same is pegged at $2.26 billion.
For 2023, the company expects its Screening revenues in the range of $1.770-$1.795 billion ($1.660-$1.690 billion). The company expects Precision Oncology revenues in the range of $605-$620 million ($600-$620 million). COVID-19 testing revenues are expected to be $5 million (unchanged).
Downsides
Escalating Costs: Exact Science resorted to several strategies to improve its revenue performance. These include portfolio expansion and penetration in the international arena. So far, this has escalated costs and operating expenses for the company.
In the first quarter of 2023, Exact Sciences’ general and administrative expenses rose 27.9%. Adjusted operating expenses dropped 0.9% year over year. The escalating costs are exerting significant pressure on the company’s bottom line.
Tough Competitive Landscape: Given the large market for colorectal cancer screening, Exact Science faces numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than the company.
Estimate Trend
In the past 90 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2023 has moved 39.1% north to ($2.07).
The Zacks Consensus Estimate for 2023 revenues is pegged at $2.41 billion, suggesting a 15.8% rise from the 2022 reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Health Equity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 15.4% compared with the industry’s 12.5% rise in the past year.
HealthEquity, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 9.5% against the industry’s 13.1% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.3% against the industry’s 20.5% decline in the past year.
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Here's Why You Should Buy Exact Sciences (EXAS) Stock Now
Exact Sciences Corporation (EXAS - Free Report) is well poised for growth in the coming quarters, led by strong Cologuard growth. The raised 2023 guidance is a major upside. However, mounting expenses and stiff competition do not bode well.
In the past year, this Zacks Rank #2 (Buy) stock has surged 88.5% against a 9.7% decline of the industry and a 18% rise of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $16.84 billion. The company’s next-year expected growth rate of 36.2% compares favorably with the industry’s growth projection of 10%.
Let’s delve deeper.
Key Drivers
Q1 Upsides: Exact Sciences exited the first quarter of 2023 with better-than-expected results. The quarterly loss narrowed significantly from the year-ago period’s levels. Robust revenues from the Screening and Precision Oncology segments contributed to first-quarter top line. During the quarter, 10,000 new healthcare professionals ordered Cologuard, bringing the total to over 312,000. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are major advantages. The raised 2023 guidance is another upside.
Enhancing Cologuard Growth: The company is currently focusing on three areas to enhance Cologuard growth. Building the best and most effective commercial organization in healthcare by investing in the leadership team, training, and sales force effectiveness is the first strategy. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years. Screening more people starting at age 45 to catch cancer earlier is the final strategy.
Per the first-quarter earnings update, the company recently ran next-generation Cologuard on nearly 7,700 blinded DeeP-C samples. The second prospective study will provide valuable evidence supporting next-generation Cologuard's clinical value and competitively unique position. In multi-cancer early detection, it plans to share two additional sets of case-control data this year, validating the comprehensive multi-marker class approach.
Raised Guidance: The company raised its 2023 revenue guidance to the range of $2.380-$2.420 billion (from the earlier guidance of $2.265-$2.315 billion). The Zacks Consensus Estimate for the same is pegged at $2.26 billion.
For 2023, the company expects its Screening revenues in the range of $1.770-$1.795 billion ($1.660-$1.690 billion). The company expects Precision Oncology revenues in the range of $605-$620 million ($600-$620 million). COVID-19 testing revenues are expected to be $5 million (unchanged).
Downsides
Escalating Costs: Exact Science resorted to several strategies to improve its revenue performance. These include portfolio expansion and penetration in the international arena. So far, this has escalated costs and operating expenses for the company.
In the first quarter of 2023, Exact Sciences’ general and administrative expenses rose 27.9%. Adjusted operating expenses dropped 0.9% year over year. The escalating costs are exerting significant pressure on the company’s bottom line.
Tough Competitive Landscape: Given the large market for colorectal cancer screening, Exact Science faces numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than the company.
Estimate Trend
In the past 90 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2023 has moved 39.1% north to ($2.07).
The Zacks Consensus Estimate for 2023 revenues is pegged at $2.41 billion, suggesting a 15.8% rise from the 2022 reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Health Equity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 15.4% compared with the industry’s 12.5% rise in the past year.
HealthEquity, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 9.5% against the industry’s 13.1% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.3% against the industry’s 20.5% decline in the past year.