It has been about a month since the last earnings report for Exact Sciences (EXAS). Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Exact Sciences due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Exact Sciences Q4 Revenues Top Estimates, Margin Down
Exact Sciences 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Exact Sciences has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Exact Sciences has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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