Exact Sciences (EXAS) Stock Gains After Price Target Increase at Canaccord

NEW YORK (TheStreet) -- Shares of Exact Sciences Corp. (EXAS) are climbing 4.46% to $30.59 after Canaccord raised its price target to $32 from $30 while maintaining its "buy" rating.

Exact Sciences is a molecular diagnostics company focused on the early detection and prevention of colorectal cancer that has developed a non-invasive screening test called Cologuard.

Canaccord increased yearly earnings estimates to $46 million from $44.7 million for 2015, and raised 2016 earnings estimates to $168 million from $160 million.

"We are raising our revenue estimates to reflect the contribution from the new 160-person sales force from Ironwood Pharmaceuticals, most notably beginning in the third quarter this year following the company's recent signaling that the Ironwood reps are contributing in its early activities," Canaccord analysts said.

Given a very large global screening market, the firm believes that there is opportunity for multiple winners, including Epigenomics AG (EPGNF) and privately held Applied Proteomics, with blood-based tests targeting those who reject colonoscopy and stool-based FIT, FOBT and Cologuard.

Separately, 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 a number of negative factors, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins."

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

  • EXACT SCIENCES CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, EXACT SCIENCES CORP reported poor results of -$1.24 versus -$0.69 in the prior year. For the next year, the market is expecting a contraction of 40.3% in earnings (-$1.74 versus -$1.24).
  • 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 122.3% when compared to the same quarter one year ago, falling from -$16.11 million to -$35.80 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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.
  • Net operating cash flow has significantly decreased to -$34.50 million or 179.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for EXACT SCIENCES CORP is rather low; currently it is at 17.67%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EXAS's net profit margin of -839.21% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: EXAS Ratings Report

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