The Fool said there’s two reasons not to worry about Exact Sciences, but also one reason to worry.
Here’s what you should know:
1. The company was losing value after preliminary fourth quarter 2017 results were less than stellar. However, when Exact Sciences reported its actual numbers, performance was still good. Total revenue increased 148 percent year over year, beating analyst estimates.
Exact Sciences did post $21.8 million in losses, but the losses were down year over year.
The Fool said although the performance didn’t meet investor expectations, it still was a strong performance.
2. Exact Sciences’ flagship product Cologuard is booming too. The company projected between 176,000 to 181,000 completed tests for the first quarter of 2018; although this only represents 3 percent growth from Q4 of 2017, it can be explained.
The Fool said the low growth was a result of the strong flu season limiting wellness-based visits. Exact Sciences expects revenues between $420 million and $430 million for 2018, which would reflect 60 percent year-over-year growth.
3. When it comes to legitimate worries, however, The Fool predicted one: market competition. Several alternative cancer-detecting tests are making inroads that could dethrone Cologuard if introduced and approved.
Still, the tests are far from receiving regulatory approval. Exact Sciences is in the midst of developing its own liquid biopsy-based cancer detection test as well.
The Fool said, “The best way for Exact Sciences to reassure anxious shareholders is to keep posting strong growth for Cologuard and to achieve success in its liquid biopsy development program. I expect the company to definitely achieve the former goal. How well it performs on the latter goal will make the difference as to whether Exact Sciences continues to be a top stock a few years from now.”
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