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Veracyte (VCYT - Free Report) delivered third-quarter 2024 earnings of 19 cents per share, which marked a stupendous improvement from the year-ago period’s loss of 3 cents per share. The figure beat the Zacks Consensus Estimate of 2 cents per share by a huge 850%.
The company-adjusted earnings per share (EPS) were 33 cents, reflecting a 94.1% year-over-year improvement.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenues
Revenues increased 28.6% year over year to $115.9 million, which outpaced the Zacks Consensus Estimate by 5.8%.
Segmental Details
Testing revenues totaled $109.5 million in the reported quarter, up 34% year over year. This rise was mainly due to Decipher and Afirma revenue growth of 48% and 19%, respectively. Testing volume improved 24% year over year to 36,792 tests.
Product revenues fell 21% year over year to $3.2 million in the third quarter. Volume was approximately 2,200 tests, down 21% year over year, as the company continued to face supply challenges.
Biopharmaceutical and other revenues of $3.1 million reflected a 23% decrease from the prior-year quarter’s figure. This was mainly due to overall spending constraints across the industry.
Margins
The total cost of revenues (product, testing, biopharmaceutical and other) was $33.9 million, up 22.9% year over year.
The gross profit rose 31.1% to $81.9 million. The gross margin expanded 135 basis points (bps) to 70.7%.
Selling and marketing expenses fell 7.1% to $22.6 million, while general and administrative expenses increased 57.6% to $25.7 million. R&D expenses totaled $17.6 million, up 31.9% year over year. The company delivered an operating profit of $15.9 million in the third quarter, an 88.3% surge year over year. Operating margin expanded 438 bps to 13.8% in the third quarter.
Cash, Capital Structure and Solvency
Veracyte exited the third quarter with cash and cash equivalents of $274.1 million, compared with $235.9 million at the end of the second quarter of 2024.
The cumulative net cash outflow from operating activities at the end of the reported quarter was $50.6 million compared with $28.7 million at the end of the year-ago comparable period.
Guidance
Vertacyte raised its financial guidance for 2024.
Revenues for 2024 are now expected to be in the band of $442-$445 million (up from the previous guidance of $432-$438 million), representing year-over-year growth of 22-23% (from 20-21% earlier). Testing revenue growth is expected to be approximately 28% (earlier it was 25%). The Zacks Consensus Estimate for the top line is currently pegged at $437.1 million.
In addition, the company now expects cash, cash equivalents and short-term investments at the end of 2024 to be $280 million to $285 million compared with the prior guidance of $260 million to $270 million.
Our Take
Veracyte reported better-than-expected third-quarter results, with its earnings and revenues surpassing the respective estimates. The company registered robust growth from its market-leading Decipher Prostate and Afirma tests. With Decipher Prostrate, Veracyte delivered a new quarterly volume record, with growth coming from both new and existing providers.
Meanwhile, the declines in Product revenues and Biopharmaceutical and other revenues were concerning, mostly affected by supplier issues and industry-wide spending constraints.
Yet, margins expansion and the raised 2024 revenue guidance instill optimism among investors.
Zacks Rank and Key Picks
Veracyte currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , ResMed Inc. (RMD - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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Veracyte Q3 Earnings Beat Estimates, 2024 Guidance Raised
Veracyte (VCYT - Free Report) delivered third-quarter 2024 earnings of 19 cents per share, which marked a stupendous improvement from the year-ago period’s loss of 3 cents per share. The figure beat the Zacks Consensus Estimate of 2 cents per share by a huge 850%.
The company-adjusted earnings per share (EPS) were 33 cents, reflecting a 94.1% year-over-year improvement.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenues
Revenues increased 28.6% year over year to $115.9 million, which outpaced the Zacks Consensus Estimate by 5.8%.
Segmental Details
Testing revenues totaled $109.5 million in the reported quarter, up 34% year over year. This rise was mainly due to Decipher and Afirma revenue growth of 48% and 19%, respectively. Testing volume improved 24% year over year to 36,792 tests.
Product revenues fell 21% year over year to $3.2 million in the third quarter. Volume was approximately 2,200 tests, down 21% year over year, as the company continued to face supply challenges.
Veracyte, Inc. Price, Consensus and EPS Surprise
Veracyte, Inc. price-consensus-eps-surprise-chart | Veracyte, Inc. Quote
Biopharmaceutical and other revenues of $3.1 million reflected a 23% decrease from the prior-year quarter’s figure. This was mainly due to overall spending constraints across the industry.
Margins
The total cost of revenues (product, testing, biopharmaceutical and other) was $33.9 million, up 22.9% year over year.
The gross profit rose 31.1% to $81.9 million. The gross margin expanded 135 basis points (bps) to 70.7%.
Selling and marketing expenses fell 7.1% to $22.6 million, while general and administrative expenses increased 57.6% to $25.7 million. R&D expenses totaled $17.6 million, up 31.9% year over year. The company delivered an operating profit of $15.9 million in the third quarter, an 88.3% surge year over year. Operating margin expanded 438 bps to 13.8% in the third quarter.
Cash, Capital Structure and Solvency
Veracyte exited the third quarter with cash and cash equivalents of $274.1 million, compared with $235.9 million at the end of the second quarter of 2024.
The cumulative net cash outflow from operating activities at the end of the reported quarter was $50.6 million compared with $28.7 million at the end of the year-ago comparable period.
Guidance
Vertacyte raised its financial guidance for 2024.
Revenues for 2024 are now expected to be in the band of $442-$445 million (up from the previous guidance of $432-$438 million), representing year-over-year growth of 22-23% (from 20-21% earlier). Testing revenue growth is expected to be approximately 28% (earlier it was 25%). The Zacks Consensus Estimate for the top line is currently pegged at $437.1 million.
In addition, the company now expects cash, cash equivalents and short-term investments at the end of 2024 to be $280 million to $285 million compared with the prior guidance of $260 million to $270 million.
Our Take
Veracyte reported better-than-expected third-quarter results, with its earnings and revenues surpassing the respective estimates. The company registered robust growth from its market-leading Decipher Prostate and Afirma tests. With Decipher Prostrate, Veracyte delivered a new quarterly volume record, with growth coming from both new and existing providers.
Meanwhile, the declines in Product revenues and Biopharmaceutical and other revenues were concerning, mostly affected by supplier issues and industry-wide spending constraints.
Yet, margins expansion and the raised 2024 revenue guidance instill optimism among investors.
Zacks Rank and Key Picks
Veracyte currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , ResMed Inc. (RMD - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.