Exact Sciences Corporation EXAS is well poised for growth in the coming quarters, led by Cologuard growth. It is progressing well with its strategic prioritization, likely to drive the company’s future growth. However, mounting expenses and stiff competition do not bode well.
In the past year, this Zacks Rank #3 (Hold) stock has surged 119.9% against a 10.3% decline of the industry and an 12.3% rise of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $14.84 billion. The company’s next-year expected growth rate of 41.1% next year compares favorably with the industry’s growth projection of 10.5%.
Let’s delve deeper.
Enhancing Cologuard Growth: Exact Science is currently focusing on three areas to enhance Cologuard growth. The first strategy is building the best and most effective commercial organization in healthcare by investing in the leadership team, training, and sales force effectiveness. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years; and third, screening more people starting at age 45 to catch cancer earlier. Regarding the latest development, more than 9,000 new healthcare professionals ordered Cologuard during the second quarter and more than 321,000 have ordered since launch. About 75% of all U.S. primary care physicians have ordered Cologuard.
Advancing New Solutions: About the third priority of advancing new solutions, Exact Sciences is planning several key milestones to bring six innovative cancer diagnostics from its pipeline to patients in need.
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In August 2023, Exact Sciences presented new data confirming Exact Sciences' approach to multi-cancer early detection (MCED), real-world outcomes using the Oncotype DX Breast Recurrence Score, and modeling comparisons between Cologuard and potential blood-based screening tests for colorectal cancer.
In June 2023, Exact Sciences entered into a separate collaboration with two renowned healthcare organizations at the forefront of cancer research. The agreements aim to improve patient care by increasing access to genomic information.
Raised Guidance: The company raised its 2023 revenue guidance to $2.441-$2.466 billion (from the earlier guidance of $2.380-$2.420 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 $1.820-$1.835 billion ($1.770-$1.795 billion). The company expects Precision Oncology revenues in the range of $615-$625 million ($605-$620 million).
Escalating Costs: Exact Sciences has grappled with escalated expenses for a while. Although the company is gradually coming out of the impact of the two-and-a-half-year-long
In the second quarter of 2023, Exact Sciences’ General and administrative expenses rose 30.9% year over year. Adjusted operating expenses in the second quarter were up 2.9% year over year. The escalating costs are putting significant pressure on the company’s bottom line.
Brutal Competitive Landscape: Given the large market for colorectal cancer screening, Exact Science faces numerous competitors, some of which possess significantly greater financial and other resources and development capabilities than the company.
The company is currently aware of at least 13 companies — Epigenomics AG, EDP Biotech Corporation, Freenome Inc., GRAIL, Inc., CellMax, Inc., Volition Diagnostics, Cambridge Epigenetix Limited, Nucleix Ltd., Singlera Genomics, DiaCarta, Genomictree, Bioprognos, and PapGene, Inc. — that have developed or are developing, liquid biopsy tests for the detection of colorectal cancer.
In the past 90 days, the Zacks Consensus Estimate for Exact Sciences’ loss for 2023 has moved from (2.16) to ($1.90).
The Zacks Consensus Estimate for 2023 revenues is pegged at $2.46 billion, suggesting an 18.1% rise from the 2022 reported number.
Some better-ranked stocks in the broader medical space are Haemonetics HAE, Quanterix QTRX and SiBone SIBN. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Haemonetics’ stock has risen 19.9% in the past year. Earnings estimates for Haemonetics have increased from $3.56 to $3.74 in 2023 and $3.96 to $4.07 in 2024 in the past 30 days. It currently sports Zacks Rank #1.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.39%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for Quanterix’s 2023 loss per share have narrowed from $1.19 to 97 cents in the past 30 days. Shares of the company have increased 167.5% in the past year against the industry’s decline of 1.7%. It currently carries Zacks Rank #2.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for SiBone’s2023 loss have narrowed from $1.42 to $1.27 per share in the past 30 days. Shares of the company have increased 31% in the past year compared with the industry’s rise of 1.9%. It currently carries Zacks Rank #2.
SIBN’s earnings beat estimates in all the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBone delivered an earnings surprise of 26.83%
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