Exact Sciences Corporation
EXAS
reported fourth-quarter 2021 net loss of $1.28, compared with the net loss of 9 cents in the year-ago period. However, the metric lagged the Zacks Consensus Estimate of a loss of 91 cents.
For the full year, net loss was $3.48 per share, narrower than the year-ago net loss of $5.45. However, the metric lagged the Zacks Consensus Estimate of a loss of $3.14.
Revenues in Detail
Fourth-quarter consolidated revenues were $473.8 million, up 1.6% year over year. The metric exceeded the Zacks Consensus Estimate by 0.2%.
Full-year revenues were $1.77 billion, reflecting an 18.5% increase from the year-ago period. Revenues were in line with the Zacks Consensus Estimate.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard and revenues from Biomatrica products, were $277.7 million, reflecting a year-over-year increase of 11% driven by Cologuard volumes. In the quarter, 10,000 new healthcare providers ordered Cologuard.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Precision Oncology revenues, including laboratory service revenues from global Oncotype products, were $149 million, up 27% year over year. Revenues from COVID-19 testing totaled $47.1 million, down 52%.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) fell 3.2% to $354.8 million. Gross margin contracted 373 basis points (bps) to 74.9%.
Research and development expenses contracted 80.2% year over year to $88.5 million. Sales and marketing expenses increased 70.4% to $284.3 million. General and administrative expenses rose 23.6% year over year to $179.4 million.
Adjusted operating expenses were $552.2 million in the fourth quarter, down 27.2% year over year. Adjusted operating loss totaled $197.4 million, narrower than the year-ago operating loss of $391.8 million.
Financial Update
Exact Sciences exited 2021 with cash and cash equivalents, and marketable securities of $1.03 billion compared with $1.84 billion at the end of 2020.
The company reported no long-term debt in its balance sheet at the end of 2021.
2022 Outlook
The company has initiated 2022 outlook.
For 2022, Exact Sciences expects revenues in the range of $1,975-$2,027 million. The Zacks Consensus Estimate for the same is pegged at $1.98 billion.
For 2022, the company expects Screening revenues in the range of $1,340-$1,367 million, Precision Oncology revenues in the band of $595-$610 million and COVID-19 testing revenues in the $40-$50 million range.
Our Take
Exact Sciences exited the fourth quarter of 2021 on a mixed note with an earnings miss and revenue beat. Revenues from the COVID-19 tests conducted during the quarter declined year over year. Moreover, the company’s escalating operating costs are building pressure on the bottom line. Contraction of gross margin is discouraging too.
On a positive note, robust total revenue growth during the reported quarter despite the pandemic-led headwinds is impressive. The company’s legacy Screening business saw significant revenue improvement during the quarter on Cologuard volume growth. The company registered strong growth in Precision Oncology driven by Oncotype DX Breast volumes.
Zacks Rank and Key Picks
Exact Sciences currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are
McKesson Corporation
MCK
,
Molina Healthcare, Inc.
MOH
and
Bio-Rad Laboratories, Inc.
BIO
.
McKesson, carrying a Zacks Rank #2 (Buy), reported third-quarter fiscal 2022 adjusted earnings per share (EPS) of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 49.7% compared with the industry’s 4.7% growth in the past year.
Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $7.41 billion outpaced the Zacks Consensus Estimate by 3.9%.
Molina Healthcare has an estimated long-term growth rate of 18.8%. MOH surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 5%.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.
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