Credit: Shutterstock photoExact Sciences ( EXAS ) rocketed to a record high Tuesday on its third straight beat-and-raise this year, as its "substantial long-term earnings power" came into clearer focus, an analyst said.
[ibd-display-video id=2368044 width=50 float=left autostart=true] By the closing bell on the stock market today , Exact jumped 9.8% to close at 54.99 after earlier rising nearly 16% to an all-time high. Meanwhile, the broader biotech group surged 2%.
The firm makes Cologuard, an at-home test for colon cancer. Benchmark analyst Raymond Myers said in a note to clients that the test is quickly becoming an industry standard which should buoy Exact in the long term.
"As Cologuard becomes a standard of care, we anticipate moderating operating expenses, continued declining cost per test and average realized reimbursement expanding toward $500," he said. "We see this driving strong cash flow within three years."
During the quarter, Exact pulled in $72.6 million in sales, up 158% year over year, beating analysts' views for $65 million, Canaccord analyst Mark Massaro wrote in a note to clients. Adjusted losses of 23 cents per share beat by 7 cents.
IBD'S TAKE:Exact posted a beat-and-raise, but other biotech firms haven't been as strong in the third quarter. Celgene's results have been described as "alarming" and Alexion Pharmaceuticals offered a mixed report. Head to IBD Industry Themes for a breakdown on key biotech earnings thus far.
"What stands out is the magnitude of the beat on the top-line, coupled with the narrowing of its operating losses, a good formula to achieve profitability sooner rather than later," Massaro said. He kept his buy rating on Exact stock.
Cologuard tests completed grew 136% vs. the year-earlier quarter to 161,000, also topping broad analyst expectations for 153,000 and guidance for 150,000, Massaro wrote.
Exact raised its 2017 guidance to $254 million-$257 million in sales, from $230 million-$240 million. That topped Massaro's view for $233 million. It expects to have 568,000 to 572,000 tests completed, above its prior forecast of 550,000 tests.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
