1. Natera, Inc. (NASDAQ:NTRA)
Duquesne Capital’s Stake Value: $452,812,000
Number of Hedge Fund Holders: 62
Natera, Inc. (NASDAQ:NTRA) is the largest holding of billionaire Stanley Druckenmiller. His fund increased its position by 81% in the third quarter of 2024. NTRA is a clinical genetic testing company based in Texas, United States. In the third quarter of 2024, the company generated $439.8 million in total revenues, a record increase of 63.9% year-over-year. Product revenues, at the same time, grew by 64.4% in the same period. Consequently, the company raised guidance for the FY 2024 revenue to $1.64 billion.
Natera, Inc. (NASDAQ:NTRA) is growing rapidly and its rapid approvals coupled with the product line is proof of that. The quarter has been transformative for the company in terms of gross margins, cash flow, and product volumes. During the same quarter, the company processed a record 775,000 tests, up from 626,000 in the third quarter of 2023. Overall, research and development costs are expected to reach $375-$400 million, positioning Natera, Inc. (NASDAQ:NTRA) as an emerging biotechnology company.
Fred Alger Management stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its Q3 2024 investor letter:
“Natera, Inc. (NASDAQ:NTRA) is a specialty lab providing genetic testing services in the reproductive health, oncology and transplant markets. Reproductive health tests are run to screen for common genetic disorders such as trisomy 13, 18, and 21 in pregnant women – these tests are also known as non-invasive prenatal testing (NIPT). The company’s oncology franchise is led by Signatera, a test used to detect minimal residual disease (MRD) – the applications of this test are primarily to monitor therapy response and detect cancer recurrence. Lastly, Natera’s transplant franchise is led by Prospera, a test used to monitor transplant organ rejection. Natera’s tests are all based on the company’s proprietary liquid biopsy platform to detect cell-free DNA. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal second quarter revenues, driven by strong volume growth from new and existing patients. Moreover, higher pricing and product cost control led to gross margin expansion, as management believes this trend should continue as key productivity initiatives like less costly sequencing in the neo-natal franchise are just beginning to positively impact earnings. Importantly, Natera achieved positive cash flow for the second consecutive quarter.”
While we acknowledge the potential of NTRA to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NTRA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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