Yahoo Finance Why Is Exact Sciences (EXAS) Up 11.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Exact Sciences (EXAS). Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Exact Sciences due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Exact Sciences Q1 Earnings Top, Sales View Raised
Exact Sciences reported a net loss of 42 cents per share for first-quarter 2023, narrower than a net loss of $1.04 per share in the year-ago quarter and the Zacks Consensus Estimate of a loss of 79 cents.
Revenues in Detail
First-quarter consolidated revenues were $602.5 million, up 24% year over year. The metric exceeded the Zacks Consensus Estimate by 11.8%.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics and immaterial revenues from Biomatrica products, were $443.2 million. The figure increased 45% year over year.
The screening revenue upside can be primarily attributed to broad-based momentum in Cologuard adoption with additional benefits from a relatively mild flu season and enhancements made last year to the company’s patient compliance program and billing systems.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $155 million, up 2% year over year. Growth was 8%, excluding the sale of the company’s prostate business and a $1 million foreign exchange headwind.
Revenues from COVID-19 testing totaled $4 million, down 86% year over year.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 26.6% to $445.6 million. The gross margin expanded 165 basis points (bps) to 73.9%.
Research and development expenses declined 6.7% year over year to $95.4 million. Sales and marketing expenses fell 19.5% to $186.9 million. General and administrative expenses rose 27.9% year over year to $217.3 million.
Adjusted operating expenses were $499.7 million in the first quarter, down 0.9% year over year. Adjusted operating loss totaled $54.1 million, narrower than the year-ago operating loss of $152.3 million.
Financial Update
Exact Sciences exited the first quarter of 2023 with cash and cash equivalents and marketable securities of $698.6 million compared with $632.1 million at the end of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of Q1, unchanged from 2022 level.
2023 View
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 now 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).
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 23.31% due to these changes.
VGM Scores
Currently, Exact Sciences has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Exact Sciences has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Exact Sciences is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Ultragenyx (RARE), a stock from the same industry, has gained 6.7%. The company reported its results for the quarter ended March 2023 more than a month ago.
Ultragenyx reported revenues of $100.5 million in the last reported quarter, representing a year-over-year change of +25.7%. EPS of -$2.33 for the same period compares with -$2.19 a year ago.
Ultragenyx is expected to post a loss of $2.08 per share for the current quarter, representing a year-over-year change of +8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ultragenyx. Also, the stock has a VGM Score of F.
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