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On Tuesday, BTIG analyst Mark Massaro maintained a Buy rating and a $5.00 price target for Exagen (NASDAQ:XGN) shares, which currently trade at $3.37. According to InvestingPro data, analysts have set targets ranging from $5.00 to $8.00, with a strong buy consensus. Massaro highlighted the company’s successful 2024, marked by a 21% increase in Average Selling Price (ASP) expansion. He noted Exagen’s confirmation of its ambition to reach Adjusted EBITDA positivity by Q4 2025, though InvestingPro indicates the company is not expected to be profitable this year.
Exagen’s optimism stems from its recent product launches, including an expansion into the rheumatoid arthritis (RA) market. The company also anticipates that its new biomarkers will drive higher ASPs, potentially adding an additional $90 per test throughout 2025. The new leadership team, CEO John Aballi and CFO Jeff Black, were commended for their effective management in expanding gross margins to 58.8% and reducing operational expenses (OPEX), which has brought the company’s cash flow trajectory toward improvement. InvestingPro analysis shows the company maintains a healthy current ratio of 4.05, indicating strong short-term financial stability.
The analyst pointed out that Exagen’s stock is currently trading at just 0.8 times BTIG’s 2026 revenue estimate of $73 million, which is below the historical average revenue multiples of approximately 3 to 7 times. This valuation, according to Massaro, reinforces the rationale behind the reiteration of the Buy rating and the $5 price target for the company’s stock.
Exagen’s focus on new product launches and biomarker development is part of its strategy to enhance its financial metrics and market presence. With the leadership’s efforts to improve profitability and the company’s strategic initiatives, Exagen is looking to position itself for future growth as it works towards its financial goals for the coming year.
In other recent news, Exagen Inc reported its fourth-quarter 2024 earnings, revealing a 6% increase in full-year revenue to $55.6 million. The company also improved its gross margin to nearly 60%, up from 56% the previous year. Exagen launched new biomarkers for its Advise CTD test, which are expected to add approximately $90 per test in incremental revenue. Looking ahead, Exagen anticipates revenue of at least $14.5 million for the first quarter of 2025 and aims for adjusted EBITDA positivity by the fourth quarter of 2025. Analysts from firms like Canaccord Genuity and Cantor Fitzgerald showed interest in the impact of these new developments on revenue and gross margins. Exagen’s strategy includes expanding sales territories and exploring biopharma partnerships to enhance market presence. The company ended 2024 with $22.2 million in cash and cash equivalents, positioning it well for future growth.
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