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Should Growth Investors Buy this Cancer Screening Biotech Stock?

Benjamin Rains

Exact Sciences EXAS is the biotech firm behind the popular at-home colon cancer screening test, Cologuard. The FDA approved the test in 2014 and EXAS boasts that it “finds 92% of colon cancers and 69% of the highest-risk precancers with 87% specificity.”

The Simple Case

Cologuard’s test volume surged 80% to 1.68 million in 2019, up from 934,000 in 2018, according to the firm’s preliminary Q4 results released its January.

Colon cancer was the third leading cause of cancer deaths in 2018, according to the World Health Organization. Luckily, cancer death rates are on the decline and the U.S. rate fell 2.2% in 2017 (most recent figures). This marked the largest single-year drop ever recorded by the American Cancer Society.

The continued expansion of preventative healthcare, such as screenings, is sure to help in the fight against the second-leading cause of death worldwide.

With this in mind, EXAS shares have soared over 415% in the last three years and Cologuard commercials have become more and more common. Despite its industry-crushing run, EXAS stock is down 10% in the last six months, which might set up a solid buying opportunity.

In mid-December, Cowen analyst Doug Schenkel claimed that Exact Sciences was undervalued by 50%. This note came out roughly a month after EXAS completed its acquisition of Genomic Health, which is expected to expand its product pipeline to address other cancers.

 

 

 

Outlook

Our Zacks estimates call for EXAS to post fiscal 2019 revenue of $875.5 million. This would mark a roughly 92% climb from 2018’s $454 Million, which was up 71% from 2017. Peeking ahead, Exact Sciences’ 2020 sales are projected to soar another 87% to $1.63 billion.

Meanwhile, its adjusted 2020 loss is projected to come in at -$0.41. This would mark solid improvement from our -$1.61 per share estimate in 2019.

 

 

 

 

Bottom Line

EXAS is currently a Zacks Rank #3 (Hold) that is part of a highly-ranked Zacks industry that includes Moderna, Inc. MRNA, Guardant Health, Inc. GH, Repligen Corporation RGEN, and others.

Exact Sciences is set to report its official Q4 and full-year fiscal 2019 financial results on February 11. And it certainly appears that EXAS is a biotech stock that growth-minded investors should think about buying, or at least keep an eye on.

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Repligen Corporation (RGEN) : Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
Moderna, Inc. (MRNA) : Free Stock Analysis Report
 
Guardant Health, Inc. (GH) : Free Stock Analysis Report
 
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