Exact Sciences (EXAS) delivered a second consecutive quarter of sales growth acceleration, helped by the popularity of its colon cancer screening test Cologuard. And EXAS stock rose Wednesday.
During the December quarter, the diagnostics company reported $553 million in sales. Sales advanced 17% year over year, following 15% growth in the September quarter. Excluding the impact of Covid tests, Exact Sciences’ sales surged 28%.
The company also reported a narrower-than-expected loss of 72 cents per share. Analysts projected a 79-cent loss, according to FactSet. Losses continue to diminish, falling from $1.28 per share in the year-ago period, though analysts don’t predict any near-term earnings for Exact.
In morning trading on today’s stock market, EXAS stock rose 1.4% near 62.10.
EXAS Stock: Cancer Screening Drives Growth
The sales growth stemmed entirely from Exact Sciences’ cancer screening test, Cologuard. Cologuard analyzes a person’s stool to look for markers consistent with cancer. The Food and Drug Administration currently allows Cologuard for people age 45 and older with an average risk of developing colon cancer. The smaller precision oncology business brought in $143.4 million in sales, down 4%.
“Our financial strength, scientific capabilities and deep partnerships with health systems put Exact Sciences in a leading position to deliver innovative tests that help prevent cancer, detect it earlier and guide treatment to more patients globally,” Chief Executive Kevin Conroy said in his prepared remarks.
Recently, EXAS stock rocketed after rival Guardant Health (GH) said its blood test had an 83% sensitivity rate in detecting colon cancer. A highly sensitive test is less likely to miss positive cases. By comparison, Exact says Cologuard has a sensitivity rate of 92%.
Credit Suisse analyst Dan Leonard kept his neutral rating on EXAS stock following the earnings report.
The rating “reflects our view that the durable value of its Cologuard test is realized while its pipeline could translate to sales more slowly than investors appreciate,” Leonard said in a note to clients.
Guidance Easily Beats Forecasts
For the year, Exact Sciences guided to $2.27 billion to $2.32 billion in sales. That includes $1.66 billion to $1.69 billion in screening revenue and $600 million to $620 million from the precision oncology unit. Covid tests are expected to bring in $5 million. Analysts called for $2.29 billion in total sales.
The guidance is less backend-loaded than analysts expected. Sales guidance for the first quarter came out 5% higher, at the midpoint, than expected, Leonard said. That follows a seasonally strong fourth quarter that generally includes billing efficiencies and quality gap orders.
EXAS stock has a strong Relative Strength Rating of 95, according to IBD Digital. This puts shares in the top 5% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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