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What's in the Cards for Exact Sciences' (EXAS) Q4 Earnings?

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Exact Sciences Corporation (EXAS - Free Report) is set to report fourth-quarter and 2019 results on Feb 11, after market close.

In the last reported quarter, the company posted a positive earnings surprise of 24.39%. It reported better-than-expected earnings in three of the trailing four quarters, with a surprise of 19.92%, on average.

Let’s take a look at how things have shaped up for this announcement.

Exact Sciences Corporation Price and EPS Surprise

Exact Sciences Corporation Price and EPS Surprise

Exact Sciences Corporation price-eps-surprise | Exact Sciences Corporation Quote

Key Catalysts

The main contributor to Exact Sciences’ top line is the laboratory service revenues generated from Cologuard, a non-invasive screening test for colorectal cancer. Cologuard volume grew quite impressively in the third quarter on receiving higher number of orders for the Cologuard test from healthcare providers. This growth is likely to have continued in the fourth quarter as well.

Further, going by the company’s outlook, the average Cologuard revenue per test and per completed test is projected to be higher in the fourth quarter than its previous-quarter level on the back of full-quarter accretion from the opening of a new lab.

Key Development

The highlight of the fourth quarter was the completion of the previously announced combination with Genomic Health, thus joining two leading brands in cancer diagnostics — Cologuard and Oncotype DX — and providing a robust platform for continued growth. The company, while announcing its preliminary result, provided an update related to the integration synergy of Genomic Health in the fourth quarter, which we have discussed in the following segment.

Q4 and 2019 Preliminary Results

Exact Sciences announced preliminary revenue results for fourth-quarter and full-year 2019 on Jan 12, 2020.

The company expects total revenues for the fourth quarter between $294 million and $296 million whereas the same metric for 2019 is $874.5-$876.5 million. The company expects a boost in the total revenues for the year owing to growth in Cologuard and Oncotype DX. Also, Screening (revenues from Cologuard and Biomatrica products) and Precision Oncology (global Oncotype DX product) proforma revenues are projected to see growth.

Cologuard and Oncotype DX are expected to have performed impressively in the to-be-reported quarter with volume increases of 477,000 (up 63%) and 41,000 (up 14%) respectively. For the quarter, Screening revenues are likely to be around $229-$230 million, indicating an increase of 61% year over year.

Precision Oncology proforma revenues for the fourth quarter are expected between $118 million and $119 million (suggesting 13% rise), provided the Genomic Health buyout is the only driving factor. However, Precision Oncology revenues for the period between Nov 8 and Dec 31, 2019 are likely to be $65-$66 million, following the completion of the Genomic Health acquisition.

Q4 & 2019 Estimates

The Zacks Consensus Estimate for total revenues of $294.6 million suggests growth of 106.1% from the prior-year quarter’s reported figure. Also, the consensus mark for loss per share of 34 cents indicates an improvement of 22.7% from the year-ago quarter's reported figure.

For the year, the Zacks Consensus Estimate for total revenues is pegged at $875.4 million. The same for loss per share is pegged at $1.61, suggesting a decline of 18.4% from the year-ago period.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Exact Sciences this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Exact Sciences has an Earnings ESP of +7.01%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks to Consider

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

DexCom, Inc. (DXCM - Free Report) currently has an Earnings ESP of +12.27% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tandem Diabetes Care, Inc. (TNDM - Free Report) has an Earnings ESP of +27.59%. It currently has a Zacks Rank #2.

Xenon Pharmaceuticals Inc. (XENE - Free Report) has an Earnings ESP of +237.50%. It currently sports a Zacks Rank #1.

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