雅虎香港財經 Should You Buy Exact Sciences (EXAS) Ahead of Q1 Earnings?
Exact Sciences EXAS is set to report its first-quarter 2024 results on May 8, after the closing bell.
Earnings Surprise History
Exact Sciences has an impeccable earnings surprise history so far. The company beat earnings estimates in each of the last four trailing quarters, delivering an average earnings surprise of 51.48%.
The Zacks Consensus Estimate for first-quarter 2024 loss per share is pegged at 50 cents. The consensus estimates for first-quarter revenues of $624.9 million.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at EXAS’ previous-quarter performance first.
Q4 Earnings Rewind
The molecular diagnostics company reported a net loss of 27 cents per share in the fourth quarter of 2023, narrower than the year-ago quarter’s loss of 72 cents and the Zacks Consensus Estimate of a loss of 53 cents. The upside was driven by robust growth in the Screening and Precision Oncology segments and strong Cologuard adoption. However, mounting expenses partially offset the upside.
Now, let’s see how things have shaped up before the first-quarter earnings announcement.
Factors to Note
Exact Sciences reports its revenues under three segments — Precision Oncology, Screening and COVID-19 testing.
Revenues in the Precision Oncology segment are likely to have been boosted by laboratory service revenues from global Oncotype DX and therapy selection tests. The steady Oncotype DX growth in the United States and internationally is likely to have driven the top line in first-quarter 2024.
The company’s Precision Oncology portfolio guides treatment decisions for more than 2 million cancer patients around the world. The company’s Oncotype DX has become the global standard of care for patients diagnosed with early-stage HR-positive HER2-negative breast cancer — the most common subtype. Exact Sciences received Oncotype DX orders from more than 120 countries, with 98% of orders from U.S. oncologists during the fourth quarter. We believe these trends to have continued through first-quarter 2024 as well, thus adding to the top line.
The increased international adoption led by Japan will likely be a key growth driver in Precision Oncology in the to-be-reported quarter. We are also upbeat about Exact Science sharing data from the prospective BLUE-C study which demonstrates that Cologuard will raise the performance bar in non-invasive screening.
Per last quarter's earnings update, Precision Oncology is likely to face revenue growth difficulties as ordering labs shift various agreements relating to whole exome sequencing and prostate cancer testing in-house. We feel this has had an impact on the company's growth.
The Zacks Consensus Estimate for the segment is pegged at $159.3 million for the first quarter of 2024.
In the first quarter of 2024, Screening Revenue is likely to have been driven by higher laboratory service revenues from Cologuard and Prevention Genetics tests.
During the fourth quarter, the company continues to see broad-based momentum in Cologuard adoption by healthcare providers, with an all-time high of 172,000 ordering Cologuard. This expanded base of ordering providers is expected to have contributed to the company’s revenues in the quarter to be reported.
Exact Sciences Corporation Price and EPS Surprise
Exact Sciences Corporation price-eps-surprise | Exact Sciences Corporation Quote
Per the fourth-quarter update, management expected first-quarter screening revenues to be down sequentially because of typical seasonal trends. Primary care utilization is lower in December and early January because of the holidays. This impacts screening revenue during the first quarter due to the normal timing between a Cologuard order and a completed test.
The Zacks Consensus Estimate for the Screening segment is pegged at $464.5 million for first-quarter 2024.
The company also adopted several strategies to improve revenue performance. These include portfolio expansion and penetration in the international arena. So far, this has escalated costs and operating expenses for the company. We expect these rising costs to put pressure on the company’s top-line growth in the first quarter as well.
Exact Sciences hasn’t recorded any revenues under the COVID-19 testing segment in the previous quarter as the pandemic has ended. This trend is expected to have continued in the to-be-reported quarter.
What Our Model Suggests
Our proven model does not conclusively predict an earnings beat for Exact Sciences this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: Exact Sciences currently has an Earnings ESP of -27.27%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: EXAS currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter:
TransMedics Group TMDX has an Earnings ESP of +240.00% and a Zacks Rank #1. The company is expected to release first-quarter 2024 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.
TransMedics has an expected earnings growth rate of 81.8% for 2024. TMDX surpassed earnings in each of the trailing four quarters, the average being 107.83%.
Lantheus LNTH has an Earnings ESP of +4.29% and a Zacks Rank #1. The company is set to release first-quarter 2024 results on May 2.
LNTH has an expected 2024 earnings growth rate of 5.5%. The company surpassed earnings in each of the trailing four quarters, the average being 14.84%.
Insulet PODD currently has an Earnings ESP of +11.11% and a Zacks Rank #2. The company is set to release its first-quarter 2024 results on May 9.
PODD has an expected long-term earnings growth rate of 18.1% compared with the industry’s 11.4%. The company surpassed earnings in each of the trailing four quarters, the average being 100.09%.
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Insulet Corporation (PODD) : Free Stock Analysis Report
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