Up around 2.5x from its low in March 2020, at the current price of $126 per share, we believe EXACT Sciences Corporation stock (NASDAQ: EXAS) has further upside potential. EXAS, a molecular diagnostics company, has seen its stock rise from $51 to $126 off its March 2020 low, much more than the S&P which increased by over 85% from its lows. Further, the stock has risen by around 25% from the level it was at before the pandemic. However, we believe that EXAS stock could rise around 25% to regain its early-2021 high of around $160, driven by expectations of steady demand growth and strong Q1 2021 results. Our dashboard What Factors Drove 140% Change In EXACT Sciences Stock Between 2017 And Now? has the underlying numbers behind our thinking.
EXAS stock’s rise since late-2017 came due to a 481% rise in revenues from $266 million in FY 2017 to $1.55 billion over the last 12 months. Despite a 50% rise in the outstanding share count, RPS (revenue-per-share) rose 330% from $2.30 to $9.90 over this period.
However, EXAS saw its P/S (price-to-sales) multiple drop from 34x in 2017 to 15x by 2020 end, and has further dropped to 14x currently. We believe that the company’s P/S ratio has the potential to rise further in the near term on expectations of continuing demand growth and a favorable shareholder return policy, thus driving the stock price higher.
Where Is The Stock Headed?
EXAS is a molecular diagnostics company, specializing in the detection of early stage cancer, especially colorectal cancer. The company’s revenues have been rising strongly since FY 2017 and the trend has continued as is evident from the company’s Q1 2021 earnings, where revenues came in at $402 million, up from $348 million. However, a surge in operating expenses saw operating loss grow to $301 million from $82 million. However, a $243 million tax benefit ensured that net loss came in at just $31 million, compared to $135 million for the same period last year.
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Early cancer detection and prevention has always been of the utmost importance and we believe demand for the company’s services will keep rising in the medium to long term, and that revenues stand to benefit further. Additionally, if the company can successfully control expenses going forward, a rise in investor expectations could drive up the company’s P/S multiple. We believe that EXAS stock can rise around 25% from current levels, to regain its early-2021 highs of $160.
While EXACT Sciences EXAS stock may move higher, it is helpful to know how its peers stack up. EXACT Sciences Stock Comparison With Peers summarizes how EXACT Sciences compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.