By Sam Boughedda
Investing.com -- Clinical genetic testing company Natera Inc (NASDAQ:NTRA) is down 48% after Hindenburg Research released a short report on the company titled "Natera: Pioneers In Deceptive Medical Billing."
The activist short-selling research firm said that after various interviews with former employees, patients, and industry experts, as well as reviews of online complaints and Freedom of Information Act requests, Austin-based Natera's revenue growth has been "fueled by deceptive sales and billing practices aimed at doctors, insurance companies and expectant mothers."
"Natera has employed a dizzying array of billing deceptions to fuel sales growth. Despite it all, the company is starkly unprofitable. We expect its 'growth' and prospects will rapidly fizzle as payors and patients wise up to its practices," the report stated.
Following the report, both Raymond James and Canaccord analysts came out to defend the company.
Hindenburg made claims regarding Natera's relationship with the non-profit entity My Genome My Life (MGML). However, Andrew Cooper at Raymond James said his conversations with Natera management included "a strong denial of any improper relationship" with MGML. However, he did concede that "some questions remain unanswered."
Canaccord's Kyle Mikson reiterated his Buy rating and $150 price target on Natera, saying Hindenburg is "known for publishing reports on stocks which Hindenburg has sold short," adding that the negative claims are "unfounded."
While explaining that short reports shouldn't be taken lightly, the analyst feels the claims in this one "appear aggressive at this juncture."