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Will Genetic Testing Drive Invitae's (NVTA) Q2 Earnings?

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Invitae Corporation  is scheduled to report second-quarter fiscal 2019 results on Aug 6, 2019, after market close.

In the first quarter of 2019, the company’s loss per share of 47 cents was wider than the Zacks Consensus Estimate by 2.2%. However, the company delivered a positive earnings surprise in three of the trailing four quarters, the average beat being 5.7%.

Let’s take a look at how things are shaping up prior to this announcement.

Factors at Play

Over the last few quarters, genetic testing, one of Invitae’s key business segments, has been consistently delivering robust performance.

Lately, the company has been witnessing a rise in the number of oncology patients undergoing genetic testing.In the last reported quarter, the company accessioned more than 94,000 samples for genetic testing, which reflected a 47% year-over-year increase. This trend is expected to have continued in the second quarter.

Invitae Corporation Price and EPS Surprise

 

With the recent launch of its proactive offering, the company has enabled access to genetic testing for a completely new set of customers. This approach has been gaining traction lately and is expected to have driven growth in the to-be-reported quarter.

The launch of non-invasive prenatal screening (NIPS) using maternal cell-free DNA in February 2019 has been strengthening the company’s portfolio of comprehensive women's health genetic testing services. This is expected to reflect on the results of the to-be-reported quarter.

Invitae is focused on widening its genome network, signing eight new biopharma partnerships since the beginning of 2019. The company expanded its Behind the Seizure program with BioMarin by partnering with two additional companies — Stoke Therapeutics and Xenon Pharmaceuticals. The company also inked a deal with Ultragenyx Pharmaceutical for a new testing program to offer sponsored genetic testing. These developments are likely to contribute to the company’s top line in the second quarter of 2019.

Which Way Are Estimates Treading?

Overall, the Zacks Consensus Estimate for total revenues of $50.5 million implies growth of 35.3% from the prior-year quarter’s reported figure. Also, the consensus mark for a loss of 48 cents is 2.1% wider than the year-ago quarter's reported figure.

What Our Quantitative Model Predicts

Our proven Zacks model clearly shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has high chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Invitae has a Zacks Rank #3, which increases the predictive power of ESP. The company has an Earnings ESP of +7.56%, which increases its chances of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering, as these have the right combination of elements to post earnings beat this quarter.

AmerisourceBergen has an Earnings ESP of +0.82% and a Zacks Rank #3.

DENTSPLY SIRONA (XRAY - Free Report) has an Earnings ESP of +6.95% and a Zacks Rank #1.

Amedisys, Inc. (AMED - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #1.

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