Exact Sciences Corp (EXAS, Financial) has demonstrated a robust performance in the stock market recently, with a notable 3.67% gain over the past week and an impressive 31.58% surge over the last three months. Currently, the company's market capitalization stands at $11.54 billion, with a stock price of $62.44. According to GuruFocus, the GF Value of the stock is $75.9, suggesting that it is modestly undervalued. This is a shift from three months ago when the GF Value was at $87.69, and the stock was considered a possible value trap.
Overview of Exact Sciences Corp
Exact Sciences Corp, based in Madison, Wisconsin, operates within the Medical Diagnostics & Research industry. The company is renowned for its innovative cancer screening and diagnostic test products, notably the Cologuard test for colorectal cancer and the Oncotype DX for breast and colon cancer. Exact Sciences is also making significant strides in developing liquid biopsy tests aimed at enhancing cancer detection and management. This ongoing innovation underscores the company's commitment to advancing medical diagnostics.
Assessing Profitability
Despite its innovative edge, Exact Sciences scores a Profitability Rank of 3/10. The company's Operating Margin is currently at -6.94%, which, although negative, fares better than 47.44% of its peers in the industry. Its Return on Equity (ROE) and Return on Assets (ROA) stand at -5.59% and -2.71% respectively, positioning it better than nearly half of the companies in its sector. The Return on Invested Capital (ROIC) is -3.36%, surpassing 50.44% of competitors. These figures highlight a challenging yet relatively competitive profitability landscape for Exact Sciences.
Growth Trajectory
Exact Sciences exhibits a strong Growth Rank of 9/10. The company has achieved a 12.00% 3-Year Revenue Growth Rate per Share, outperforming 67.53% of its industry counterparts. Over five years, this rate accelerates to 26.90%, surpassing 85.63% of competitors. The anticipated Total Revenue Growth Rate for the next three to five years is 13.19%, which is also above industry average. However, its 5-Year EPS without NRI Growth Rate stands at -11.10%, indicating challenges in maintaining consistent earnings growth.
Investment Insights
Notable investors in Exact Sciences include the Vanguard Health Care Fund (Trades, Portfolio), holding 5,033,812 shares, Baillie Gifford (Trades, Portfolio) with 1,426,617 shares, and Larry Robbins (Trades, Portfolio) who owns 629,455 shares. These holdings reflect a strong confidence from institutional investors, underscoring the potential they see in the company's growth trajectory and market strategy.
Competitive Landscape
Exact Sciences operates in a competitive landscape with key players like Charles River Laboratories International Inc (CRL, Financial), Qiagen NV (QGEN, Financial), and Medpace Holdings Inc (MEDP, Financial), which have market caps of $10.39 billion, $10.29 billion, and $11.83 billion respectively. This positioning highlights a tightly contested sector where innovation and strategic advancements are crucial for gaining an edge.
Conclusion
In conclusion, Exact Sciences Corp's recent stock performance and market valuation reflect a dynamic interplay of innovation, investor confidence, and competitive positioning. While the company faces profitability challenges, its strong growth metrics and strategic focus on developing advanced diagnostic solutions position it well for future opportunities. Investors should consider the potential for growth against the backdrop of industry competition and inherent business risks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
