Exact Sciences Corporation EXAS reported a net loss of 21 cents in third-quarter 2024 compared with break-even earnings in the year-ago quarter. The figure was wider than the Zacks Consensus Estimate of a loss of 20 cents per share.
EXAS’ Q3 Revenues
Consolidated revenues totaled $708.7 million, up 12.8% on a reported basis and 13% on a core revenue basis. The figure missed the Zacks Consensus Estimate by 1.2%.
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Following the announcement, EXAS’ shares plunged nearly 30% in the after-hours trading yesterday.
Segmental Review of EXAS’ Q3 Revenues
Screening revenues, including laboratory service revenues from Cologuard and PreventionGenetics, totaled $544.9 million. The figure increased 15% year over year, due to a rise in the number of completed Cologuard tests.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $163.8 million, up 5% year over year and on a core basis. This upside was propelled by Oncotype DX, which expanded 28% internationally.
The company did not recognize any revenues from COVID testing in the third quarter.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences’ gross profit rose 11.5% year over year to $512.6 million, despite a 16.3% rise in the cost of revenues (excluding the amortization of acquired intangibles). The gross margin contracted 85 basis points (bps) to 72.3%.
Research and development expenses fell 10.2% year over year to $100.1 million. Sales and marketing expenses moved up 12.4% to $194.7 million. General and administrative expenses declined 0.1% year over year to $217 million.
Overall, the adjusted operating profit totaled $0.6 million against the year-ago operating loss of $42.2 million.
EXAS’ Financial Update
Exact Sciences exited the third quarter with cash and cash equivalents and marketable securities of $588.8 million compared with $530.2 million at the end of second-quarter 2024.
Exact Sciences' Revised 2024 View
Exact Sciences now predicts total revenues for the full year to be in the range of $2.73-$2.75 billion (previously $2.81-$2.85 billion). The Zacks Consensus Estimate for the same is pegged at $2.83 billion.
Among this, Screening revenues are expected to be in the range of $2.080-$2.095 billion (earlier $2.155-$2.175 billion). Precision Oncology revenues are anticipated to be in the band of $650-$655 million (previously $655-$675 million).
The company reduced the full-year adjusted EBITDA guidance to $310-$320 million (previously $335-$355 million).
Our Take on EXAS
Exact Sciences exited the third quarter of 2024 with both earnings and revenues missing the respective estimates. The screening revenue growth was impacted by the slower pace of demand within primary-care offices and is expected to have a bigger impact on fourth-quarter revenues due to the normal 30-day timing between a Cologuard order and a completed test.
Additionally, disruption from Hurricane Helene and Milton negatively impacted Cologuard orders and results in September and October. The transitional challenges from moving the Precision Oncology portfolio onto the Exact Nexus platform also affected the company’s ability to collect on some of the tests performed. Furthermore, the dismal outlook for the full year is discouraging for the stock.
On a promising note, the top line improved year over year in the quarter, driven by the broad-based momentum in Cologuard adoption and the international expansion of Oncotype DX. EXAS delivered test results to a higher number of patients, improved profitability and achieved milestones in its pipeline of innovative-cancer diagnostics.
EXAS’ Zacks Rank and Other Key Picks
Exact Sciences currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the broader medical space are Quest Diagnostics DGX, Intuitive Surgical ISRG and Boston Scientific Corporation BSX.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which surpassed the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DGX’s 2024 earnings are expected to surge 2.1% year over year. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.3%.
Intuitive Surgical, currently carrying a Zacks Rank #2, posted third-quarter 2024 EPS of $1.84, which beat the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.
ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.9%.
Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2024 adjusted earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion beat the Zacks Consensus Estimate by 4.5%.
BSX has an estimated 2024 earnings growth rate of 17.6% compared with the industry’s 11.5%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
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