Thursday, Canaccord Genuity adjusted its price target for Exact Sciences (NASDAQ:EXAS) shares, a molecular diagnostics company, to $85.00, a decrease from the previous target of $90.00. The firm has maintained a Buy rating on the stock.
The revision follows the company's first quarter 2024 results, which were released after the market closed on Wednesday and surpassed the analyst's projections as well as the FactSet consensus.
Exact Sciences reported a year-over-year revenue growth of 6%, which, while modest, comes off a strong performance in the same quarter of the previous year.
The company also provided second quarter 2024 revenue guidance slightly below analyst expectations but reaffirmed its full-year 2024 guidance. Canaccord Genuity's report suggests that the lowered price target accounts for a more cautious outlook, given that recent commercial investments have not yet significantly impacted revenue.
Despite the after-hours trading on May 8 indicating a roughly 20% drop in share price, Canaccord Genuity remains optimistic about Exact Sciences' future. The firm expects that the investments in sales and marketing will yield substantial returns in the second half of 2024.
The analyst noted that concerns regarding the organic growth potential of Cologuard, one of the company's products, are exaggerated and that such commercial investments are typical for boosting test volume growth.
The firm's analyst believes that the current share price of Exact Sciences presents an attractive opportunity, suggesting over 40% upside potential to the newly set price target of $85.
The company's steady guidance for the year and anticipation of benefits from its recent investments seem to underscore Canaccord Genuity's positive outlook on the stock.
InvestingPro Insights
In light of Canaccord Genuity's recent price target adjustment for Exact Sciences, InvestingPro data and tips offer additional context for investors considering the stock. Exact Sciences has a market capitalization of $10.94 billion and is trading near its 52-week low, indicating potential for those looking for entry points in the market. Despite a negative P/E ratio of -52.52, reflecting the company's lack of profitability over the last twelve months, its revenue growth remains robust at nearly 20% for the same period. This suggests that while the company is currently unprofitable, it is still expanding its market presence.
An InvestingPro Tip highlights that analysts have revised their earnings downwards for the upcoming period and do not anticipate the company will be profitable this year. This aligns with the cautious stance taken by Canaccord Genuity. However, it's notable that Exact Sciences' liquid assets exceed its short-term obligations, providing some financial stability. Moreover, while the stock has fared poorly over the last month with a price total return of -19.9%, it has delivered a high return over the last decade, which may appeal to long-term investors.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips on Exact Sciences, which can be accessed at https://www.investing.com/pro/EXAS. Utilizing the promo code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights and make more informed decisions.
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