Exact Sciences Corporation
EXAS
continues to make significant progress with its Cologuard test. However, the pandemic-led continued business disruption is a concern. Exact Sciences currently carries a Zacks Rank #3 (Hold).
Exact Sciences’ fourth-quarter 2021 revenues topped the Zacks Consensus Estimate. Robust total revenue growth during the reported quarter despite the pandemic-led headwinds was impressive. The company’s legacy Screening business saw significant improvement in revenues during the quarter on Cologuard volume growth. The company registered strong growth in Precision Oncology, driven by Oncotype DX Breast in the United States and international market.
The company is currently focusing on three areas to enhance Cologuard growth. Building the best and most effective commercial organization in healthcare by investing in the leadership team, training, and sales force effectiveness is the first strategy. Secondly, improving the customer experience by making it simpler to order Cologuard electronically and continue rescreening patients every three years; and three, screening more people starting at age 45 to catch cancer earlier. During the fourth-quarter earnings update, the company noted that it achieved more than $100 million in revenues from patients being rescreened with Cologuard, more than $40 million from patients in the 45 to 49 age group and a 10-point improvement in the electronic ordering rate to 50%.
Exact Sciences Corporation Price
Exact Sciences Corporation price
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Exact Sciences Corporation Quote
Following the acquisitions of Paradigm and Ashion, Exact Sciences is now offering therapy selection tests for patients with advanced cancer, providing even more value to oncologists, researchers and pharma partners. The Oncotype DX Breast test is witnessing greater market adoption by helping in the diagnosis of 1.3 million women with early-stage breast cancer supported by the publication of the RxPONDER study in the New England Journal of Medicine, and adding a new test to support comprehensive tumor profiling for advanced cancer, oncomap ExTra.
Exact Sciences is also focused on the digital customer experience that will benefit Cologuard and future screening tests even with fewer cancer screens throughout COVID-19 and more recently due to the Delta variant. The company is also focused on enhancing the customer experience and advancing new diagnostic solutions by executing the priorities that will ensure genomic information is routinely used to detect, diagnose, and treat cancer.
On the flip side, Exact Sciences exited the fourth quarter of 2021 on a mixed note. The company’s net loss in the fourth quarter was wider than estimated. 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. The contraction of gross margin is discouraging too.
According to Exact Sciences, there are two main pandemic-led dynamics impacting the business. These are reduced physician office access for the company’s field teams and fewer in-person wellness visits. The company has not seen much improvement in these two factors as previously expected. Exact Sciences particularly noted that the recent uptick in COVID-19 cases from the highly contagious Omicron and Delta variants is partly responsible for this drag.
In offices with physician access, the company is seeing faster growth in Cologuard orders. Again, in-person wellness visits are limited whereas cancer screening conversations and Cologuard orders typically occur during the routine wellness visit. This is typically impacting Exact Sciences’ overall performance. Margins were down mainly due to lower COVID-19 testing volumes.
Over the past year, Exact Sciences has underperformed its
industry
. The stock has declined 51.6% compared with the industry’s 39.4% fall.
Key Picks
A few better-ranked stocks in the broader medical space are
Henry Schein, Inc.
HSIC
,
McKesson Corporation
MCK
and
AmerisourceBergen Corporation
ABC
.
Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein has outperformed the industry over the past year. HSIC has gained 34.2% compared with the industry’s 12.2% rise over the past year.
McKesson has a long-term earnings growth rate of 11.8%. McKesson’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 20.6%, on average. It carries a Zacks Rank #2.
McKesson has outperformed the industry over the past year. MCK has gained 27.7% against a 12.7% industry decline in the said period.
AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates thrice and missed once, delivering an average surprise of 2.3%. The stock currently has a Zacks Rank #2.
AmerisourceBergen has outperformed its industry in the past year, gaining 37% compared with the industry’s 12.2% rise.
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