On Wednesday, Benchmark analyst Bruce Jackson revised the price target on shares of Exact Sciences (NASDAQ:EXAS), reducing it to $65 from the previous $67, while reiterating a Buy rating on the stock. The adjustment follows the company's third-quarter earnings report, which fell short of expectations, prompting a downward revision of its revenue forecast for the remaining months of 2024.
Exact Sciences reported that a variety of factors such as altered seasonality trends, hurricane disruptions, and increased necessity for sales and marketing investments led to the earnings miss.
Despite these setbacks, management is confident in their ability to remedy the issues and restore the company to its former growth trajectory, aiming for 20% Adjusted EBITDA margins by 2027. However, they anticipate it will take a quarter or two to resolve the current challenges, leading to the revised guidance.
The company's outlook is not entirely dim, as management remains optimistic about the potential of their flagship product, Cologuard, to continue to capture rescreening business. They also foresee benefits from health system partnerships that encourage patient compliance with colon cancer screening protocols.
Moreover, the anticipated launches of Cologuard Plus in the second quarter of 2025 and the Oncodetect MRD test in the first half of 2025 are expected to contribute to the company's growth.
In light of these developments, Benchmark has also lowered its estimates for Exact Sciences. Despite the reduction in the price target and estimates, the firm's Buy rating indicates a continued positive outlook on the stock's potential performance in the market.
Investors will be watching closely as Exact Sciences works through its current challenges and progresses toward its long-term financial goals. With new products on the horizon, the company aims to regain its momentum and deliver on its promises to shareholders.
In other recent news, Exact Sciences reported a third-quarter earnings miss, with revenue falling short of the projected $716.8 million, reaching $709 million instead, marking a 13% increase year-over-year. 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.
Baird maintained an Outperform rating on Exact Sciences but reduced the stock's price target from $70.00 to $67.00. The adjustment came after the company reported third-quarter revenue that fell short of expectations and significantly lowered its revenue guidance for 2024.
Similarly, BTIG lowered its price target to $65 from $82 while maintaining a Buy rating on the stock, reflecting the company's recent performance and a substantial downward revision of its guidance.
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.
The company's strong cash position of $1.02 billion as of the end of the third quarter signifies the company's ongoing efforts to navigate through the current challenges. These are some of the recent developments in the company.
InvestingPro Insights
To complement the analysis provided, recent data from InvestingPro offers additional context on Exact Sciences' (NASDAQ:EXAS) financial position and market performance. Despite the recent earnings miss and lowered guidance, the company has shown a strong return over the last three months, with a price total return of 27.79% during this period. This suggests that investors may be looking beyond the short-term challenges highlighted in the article.
InvestingPro Tips indicate that while Exact Sciences is not currently profitable, its liquid assets exceed short-term obligations, which could provide some financial flexibility as the company works through its current issues. This aligns with management's confidence in addressing the recent setbacks.
It's worth noting that analysts do not anticipate the company will be profitable this year, which is consistent with the article's mention of the company's aim for 20% Adjusted EBITDA margins by 2027. This long-term target suggests that profitability remains a future goal rather than an immediate expectation.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Exact Sciences, which could provide further insights into the company's prospects as it navigates its current challenges and prepares for future product launches.
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