On Wednesday, Baird maintained an Outperform rating on shares of Exact Sciences (NASDAQ:EXAS) but reduced the stock's price target from $70.00 to $67.00. The adjustment comes after the company reported third-quarter revenue that fell short of expectations and significantly lowered its revenue guidance for 2024. The downward revision was primarily due to weaker than anticipated Screening trends.
Exact Sciences experienced an unusual order pattern for its Cologuard product between August and October, which, along with commercial execution challenges, hurricane impacts, and slower-than-expected returns on sales and marketing investments, contributed to the disappointing revenue figures. The management highlighted these factors during their commentary on the recent performance.
The company's shares were indicated to open lower following the release of these results on Tuesday. Baird analyst noted that while the recent earnings report could negatively affect investor sentiment in the short term and raise concerns about the medium-term growth prospects for Screening, the firm still sees a positive outlook for Exact Sciences in the medium term.
Despite the softer near-term trends, Baird's stance suggests confidence in the company's ability to navigate through the current challenges. The revised price target reflects the firm's recalibrated expectations in light of the recent financial updates provided by Exact Sciences.
In other recent news, Exact Sciences has experienced a series of significant developments. The company reported a third-quarter earnings miss, with a revenue of $709 million, up 13% year-over-year, but falling short of the projected $716.8 million.
The net loss of -$0.21 per share was slightly worse than the -$0.20 anticipated by analysts. Following these results, Exact Sciences revised its full-year guidance downwards, with the new revenue forecast standing at $2.73-2.75 billion, significantly below the consensus estimate of $2.83 billion.
Furthermore, BTIG adjusted its outlook on Exact Sciences, lowering the price target to $65 from $82, while maintaining a Buy rating on the stock. This decision was influenced by the company's recent performance and a substantial downward revision of its guidance. Despite these challenges, BTIG reaffirmed its confidence in the stock, indicating that the company might be undergoing a recovery process following the implementation of commercial changes.
Despite the weaker than expected results, Exact Sciences announced several pipeline advancements, including FDA approval for its next-generation Cologuard Plus test and promising data from its blood-based colorectal cancer screening test. These recent developments, coupled with the company's strong cash position of $1.02 billion as of the end of the third quarter, signify the company's ongoing efforts to navigate through the current challenges.
InvestingPro Insights
Despite Exact Sciences' recent challenges, InvestingPro data reveals some interesting financial metrics that provide additional context to the company's situation. As of the last twelve months ending Q2 2024, Exact Sciences reported a revenue of $2.61 billion, with a notable revenue growth of 13.54%. This growth, coupled with a strong gross profit margin of 73.19%, suggests that the company maintains a solid foundation despite the recent setbacks mentioned in the article.
InvestingPro Tips highlight that Exact Sciences has demonstrated a strong return over the last three months, with the stock showing a 27.79% price total return in this period. This positive momentum could be encouraging for investors, despite the recent downward revision in revenue guidance.
However, it's important to note that Exact Sciences is not currently profitable, with an adjusted operating income of -$282.27 million in the last twelve months. This aligns with another InvestingPro Tip indicating that analysts do not anticipate the company to be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing Exact Sciences' future prospects. The platform currently lists 11 more tips for EXAS, providing a deeper dive into the company's financial health and market position.
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