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Will Genetic Testing Drive Invitae's (NVTA) Q3 Earnings?

Zacks Equity Research

Invitae Corporation NVTA is scheduled to report third-quarter fiscal 2019 results on Nov 6, after market close.

In the last-reported quarter of 2019, the company’s loss per share of 52 cents was wider than the Zacks Consensus Estimate by 8.3%. However, the company delivered a negative earnings surprise in two of the trailing four quarters, the average four-quarter miss being 0.4%.

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 11000 samples for genetic testing, which reflected a 52% year-over-year increase. This trend is expected to have continued in the third quarter.

Invitae Corporation Price and EPS Surprise

 

Invitae Corporation Price and EPS Surprise

Invitae Corporation price-eps-surprise | Invitae Corporation Quote

With the recent launch of its proactive offering, the company has enabled access to genetic testing for a completely new set of customers. This development has led to increased customer adoption and is expected to have driven the top line in the to-be-reported quarter.

The launch of non-invasive prenatal screening (NIPS) using maternal cell-free DNA earlier this year has been strengthening the company’s portfolio of comprehensive women's health genetic testing services. This is expected to show on third-quarter results.

Invitae is focused on widening its genome network and signing biopharma partnerships since the beginning of 2019. Earlier this year, the company expanded its Behind the Seizure program with BioMarin by partnering with two additional companies — Stoke Therapeutics and Xenon Pharmaceuticals. In the last-reported quarter, Invitae acquired Singular Bio and Jungla for technologies to enhance the quality and scale of business. These developments are likely to have contributed to the company’s top line in the third quarter.

Which Way Are Estimates Treading?

Overall, the Zacks Consensus Estimate for total revenues of $55 million implies growth of 47.2% from the prior-year quarter’s reported figure. Also, the consensus mark for a loss of 52 cents is 15.6% wider than the year-ago quarter's reported figure.

Earnings Whispers

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. That is not the case here as you will see below.

Earnings ESP:  Invitae has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Invitae carries a Zacks Rank #2.

Stocks Worth a Look

Here are a few medical stocks worth considering from the same space with the right mix of elements to surpass expectations this earnings season.

DENTSPLY SIRONA XRAY has an Earnings ESP of +5.05% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AmerisourceBergen Company ABC has an Earnings ESP of +0.55% and a Zacks Rank #3.

Cardinal Health CAH has an Earnings ESP of +0.69% and a Zacks Rank #3.

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Invitae Corporation (NVTA) : Free Stock Analysis Report
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
 
AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
 
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