Tuesday, BTIG raised the price target for Exact Sciences (NASDAQ:EXAS) to $75 from $65, maintaining a Buy rating on the stock. This adjustment follows the announcement that the company secured approximately $592 per test for Cologuard Plus, marking a 16% increase over the price of the original Cologuard test.
The analyst from BTIG noted that Exact Sciences' shares rose around 10% after the pricing news was released. The price increase for Cologuard Plus, which was anticipated by investors to some degree, was previously shrouded in uncertainty regarding the extent and method of the adjustment. The recent clarification is seen as a positive development that reduces the investment risk associated with the stock.
Cologuard Plus received FDA approval last month, and Exact Sciences plans to launch the product in late Q1 or early Q2 of 2025. The new price is expected to be initially applicable to the company's Medicare Fee-for-Service population, which comprises about 15-20% of its total Cologuard test users.
The analyst indicated that while a detailed update to their financial model will be conducted later, the immediate increase in the price target to $75 reflects the anticipated benefit from the new, higher pricing of Cologuard Plus. This revision underscores the positive outlook for Exact Sciences as it prepares to introduce the next generation of its flagship product to the market.
In other recent news, Exact Sciences Corporation has experienced significant developments, primarily revolving around its Cologuard Plus test. The Centers for Medicare & Medicaid Services (CMS) have set the final Clinical Laboratory Fee Schedule rates for the test at around $591, marking a 16% increase over the original Cologuard test's price. This development has led to an upward revision of the stock's price target by TD Cowen from $82.00 to $86.00, maintaining a Buy rating.
The increase in CMS pricing has been positively received by several analyst firms, including Piper Sandler, Leerink Partners, Bernstein SocGen Group, Stifel, and Wolfe Research. These firms have maintained their positive ratings and price targets for Exact Sciences, reflecting confidence in the company's growth prospects.
Exact Sciences' Q3 2024 earnings revealed a 13% year-over-year revenue increase, reaching $709 million, and a substantial 75% increase in adjusted EBITDA to $99 million. The company has revised its full-year revenue guidance to between $2.73 billion and $2.75 billion, with adjusted EBITDA expected to be between $310 million and $320 million.
InvestingPro Insights
While BTIG's optimistic outlook on Exact Sciences (NASDAQ:EXAS) is reflected in their raised price target, recent InvestingPro data provides additional context for investors. Despite the positive news surrounding Cologuard Plus pricing, Exact Sciences' stock has faced challenges, with a 20.21% decline over the past month and a 25.47% drop year-to-date. This performance aligns with an InvestingPro Tip noting that the stock has fared poorly over the last month.
However, it's important to consider that Exact Sciences maintains a strong market position, with a market capitalization of $11.01 billion. The company's revenue growth remains positive, with an 11.91% increase over the last twelve months and a 12.78% quarterly growth. These figures suggest that despite recent stock performance, Exact Sciences continues to expand its business.
An InvestingPro Tip highlights that the company's liquid assets exceed short-term obligations, indicating a solid financial foundation as it prepares for the Cologuard Plus launch. This financial stability could be crucial for supporting the product's rollout and potential market expansion.
Investors seeking a more comprehensive analysis can access 6 additional InvestingPro Tips for Exact Sciences, providing deeper insights into the company's financial health and market position.
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