For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Exact Sciences (EXAS) ten years ago? It may not have been easy to hold on to EXAS for all that time, but if you did, how much would your investment be worth today?
Exact Sciences' Business In-Depth
With that in mind, let's take a look at Exact Sciences' main business drivers.
Exact Sciences Corporation is a molecular diagnostics company focused on the early detection and prevention of some of the deadliest forms of cancer. The company has developed an accurate, non-invasive, patient-friendly screening test called Cologuard for the early detection of colorectal cancer and pre-cancer. The company is currently working on the development of additional tests for other types of cancer, with the goal of becoming a leader in cancer screening and diagnostics.
On Nov 8, 2019, Exact Sciences completed the acquisition of Genomic Health for a value of approximately $2.8 billion. Prior to merger, Genomic Health was a prominent provider of genomic-based diagnostic tests in the field of cancer care. The company used to offer its line of products under the brand name Oncotype DX.
Following the consolidation, Exact Sciences currently has two of the strongest brands in cancer diagnostics, Cologuard and Oncotype DX.
Cologuard Test: This is a non-invasive stool-based DNA (sDNA) screening test that utilizes a multi-target approach to detect DNA and hemoglobin biomarkers associated with colorectal cancer and pre-cancer.
Oncotype DX: Genomic Health’s first product, the 21-gene Oncotype DX breast cancer test launched in Jan 2004, is used to predict the likelihood of cancer recurrence, patient survival within 10 years of diagnosis and chemotherapy benefit for early-stage patients.
In Jan 2010, Genomic launched its Oncotype DX colon cancer test to predict individual recurrence risk in stage II colon cancer patients post-surgery although the test is yet to make any significant contribution to the top line. In May 2013, Genomic Health commercialized Oncotype DX prostate cancer test.
Exact Sciences acquired Paradigm Diagnostics and Viomics in March 2020, Base Genomics Limited in October 2020 and Thrive Earlier Detection Corporation in January 2021.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Exact Sciences ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $13,661.81, or a 1,266.18% gain, as of July 7, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 224.33% and the price of gold went up 12.72% over the same time frame.
Looking ahead, analysts are expecting more upside for EXAS.
Exact Sciences has outperformed its industry in the past year. Robust top-line growth during the first quarter of 2021, despite the pandemic-led headwinds, is impressive. The contraction in quarterly loss compared to the year-ago period buoys optimism. Revenues from the COVID-19 tests conducted during the quarter contributed to the first-quarter top line. The company’s legacy Screening business saw an improvement in revenues on Cologuard volume growth. Expansion in gross margin bodes well. Notably, Exact Sciences exited the first quarter with better-than-expected numbers. On the flip side, continued dismal bottom-line performance in the first quarter is discouraging. Contraction in gross margin on escalating costs is worrisome as well. The company’s operating loss in the reported quarter does not bode well either.
The stock has jumped 6.99% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021; the consensus estimate has moved up as well.
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