4. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 38
Percentage Increase in Share Price Over Past Six Months: 83%
Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products in the United States and internationally. In early May, the firm posted first quarter earnings that beat expectations on the top and bottom levels. It also raised 2023 guidance in the process. The firm now expects 2023 revenue of $2.38 billion to $2.42 billion, against estimates of $2.3 billion. The previous guidance was $2.265 billion to $2.315 billion.
On May 15, investment advisory Piper Sandler maintained a Neutral rating on Exact Sciences Corporation (NASDAQ:EXAS) stock and raised the price target to $80 from $70. The price target was raised after an impressive earnings report.
At the end of the first quarter of 2023, 38 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Exact Sciences Corporation (NASDAQ:EXAS), compared to 39 in the preceding quarter worth $1.3 billion.
In its Q1 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Exact Sciences Corporation (NASDAQ:EXAS) was one of them. Here is what the fund said:
“We initiated a position in Exact Sciences Corporation (NASDAQ:EXAS), a cancer diagnostics company whose flagship product is Cologuard, a stool-based DNA colon cancer screening test. Colon cancer is the second leading cause of cancer deaths in the U.S. Patients who are diagnosed early are more likely to have a complete recovery. Exact has a large opportunity to screen patients with Cologuard. There are roughly 110 million Americans between the ages of 45 and 85 who are at average risk for colon cancer. At a three-year screening interval and an average revenue per test of roughly $500, this represents a potential $18 billion annual revenue opportunity for Cologuard. Recently, the Cologuard business has exhibited strong momentum with several tailwinds driving growth, including demand from health systems, which are incentivized to comply with screening guidelines for enhanced payments, the American Cancer Society guideline change lowering the age of recommended screening from 50 to 45, increased adoption of electronic ordering, and a growing rescreening opportunity. Later this year, Exact expects to report clinical trial data on Cologuard 2.0, a second-generation screening test that management believes will have enhanced specificity and boost gross margins. Exact also plans to participate in the market for minimal residual disease testing and multi-cancer early detection, two large new market opportunities for the company. After many years of heavy investments in its laboratories, IT, and distribution, the company recently turned adjusted EBITDA positive and expects to turn free cash flow positive next year. Long term, management targets 80% gross margins and 40% adjusted EBITDA margins for the business.”
