12 Best Diagnostics Stocks to Invest In Right Now

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3. Natera, Inc. (NASDAQ:NTRA)

Number of Hedge Fund Holders: 77

Natera, Inc. (NASDAQ:NTRA) is a diagnostics company that develops and commercializes molecular testing services, applying its technological services in oncology, women’s health, and organ health. The company provides various diagnostic tests, including Panorama non-invasive prenatal test (NIPT), Vistara, horizon carrier screening (HCS), spectrum pre-implantation genetic screening and spectrum pre-implantation genetic diagnosis, Anora products of conception (POC), and non-invasive paternity testing (PAT).

2024 was a transformational year for the company, as it ended fiscal Q4 2024 with significant momentum going into 2025. Revenues in the quarter reached $476 million, reflecting a sound 53% year-on-year growth and $4 million above its January pre-announcement of $472 million. Volumes were up 26% compared to fiscal Q4 2023. In addition, gross margins in fiscal Q4 2024 were 63%, significantly higher than the 51% it posted a year ago.

Natera, Inc. (NASDAQ:NTRA) generated around $46 million of cash flow in fiscal Q4 2024, wrapping up the full year with about $86 million in total cash flow generation. It plans to continue this momentum, reinvesting its cash flows in its business in 2025. Management is confident that this approach holds the potential to enhance the company’s growth profile in 2026 and beyond. In addition, the company’s growing market penetration in oncology is expected to support price and volume growth.

Parnassus Growth Equity Fund stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its Q4 2024 investor letter:

“Natera, Inc. (NASDAQ:NTRA), an industry leader in genetic testing for women’s health and cancer recurrence monitoring, reported robust financial results for the third quarter of 2024. The company’s increasing market penetration in oncology and reimbursement by insurance should support continued volume and price growth.

Natera shares rose throughout the year, as the genetic testing company gained market share, improved reimbursement and continued to publish data and gain traction for its cancer recurrence monitoring tests.”

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