Why Exact Sciences (EXAS) Stock Is Gaining Today

NEW YORK (TheStreet) -- Exact Sciences (EXAS) shares are up 7.7% to $18.41 on Tuesday after the FDA approved the company's non-invasive colon cancer detection test, Cologuard.

The FDA said that the test identified more cancers during trials than a rival blood tests did.

In separate news, Canaccord Genuity reiterated its "buy" rating on the stock while upping its price target to $20 from $19. 

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TheStreet Ratings team rates EXACT SCIENCES CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXACT SCIENCES CORP (EXAS) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 57.8% when compared to the same quarter one year ago, falling from -$12.31 million to -$19.44 million.
  • The gross profit margin for EXACT SCIENCES CORP is currently extremely low, coming in at 0.00%. Despite the low profit margin, it has increased significantly from the same period last year.
  • EXACT SCIENCES CORP's earnings per share declined by 26.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EXACT SCIENCES CORP continued to lose money by earning -$0.69 versus -$0.88 in the prior year. For the next year, the market is expecting a contraction of 65.2% in earnings (-$1.14 versus -$0.69).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Biotechnology industry and the overall market, EXACT SCIENCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • EXAS, with its very weak revenue results, has greatly underperformed against the industry average of 41.0%. Since the same quarter one year prior, revenues plummeted by 100.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: EXAS Ratings Report
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