Time to Buy These 3 Healthcare Companies That Raised Revenue Guidance?
MarketBeat.com | Jan 17, 2024 12:50PM ET
- Exact Sciences develops cancer detection and diagnostic tests like Cologuard.
- Hologic reported Q3 2023 17.5% organic revenue growth, excluding COVID-related revenues, which resulted in a drop of 5.5% year-over-year as normalization continues.
- Amicus Therapeutics develops treatments for rare diseases like Fabry and Pompe disease.
The new year brings a clean slate heading into the fourth-quarter earnings season. Companies can usually gauge if their previous forecasts were in line or need to be adjusted to warn or prepare investors ahead of time.
Some companies may partake in the guidance shuffle dance, purposely lowballing forecasts to hop over the original forecasts for a beat, while some companies overpromise and underdeliver. Here are three healthcare companies in the medical sector starting the year on the right foot by raising their revenue guidance.
h2 Exact Sciences Co./h2Exact Sciences Co. (NASDAQ:EXAS) provides FDA-approved cancer screening and diagnostic test products. Its leading product is Cologuard, an at-home stool-based DNA test to detect colorectal cancer. Healthcare insurers and systems have used it as a standard method of preventative care for years.
The test usually arrives in the mail and requires a stool sample to be taken and mailed back quickly. It's simple, convenient and noninvasive. It's recommended once every one to three years starting at age 45. With an aging population, the product has been a solid leading revenue machine for the company.
h2 More cancer tests/h2Exact has many other cancer tests: Oncotype DX, a genomic profiling test for breast cancer; CancerSEEK, a blood-based test for early detection of up to eight types of cancer; and the Oncoguard Liver, a blood test for the fastest-growing cause of cancer-related deaths, liver cancer (hepatocellular carcinoma). It also offers the Riskguard Hereditary Cancer Test, a 32-gene sequencing test for detecting inherited forms of cancer.
h2 Pipeline of tests/h2Cancerguard is in the developmental stage and detects multiple cancers in its earliest stages. The next-gen Cologuard is a multi-target stool DNA test undergoing one of the largest clinical trials with over 20,000 adults aged 40 and over in its BLUE-C study.
Oncodetect is a tumor-informed molecular residual disease (MRD) test that refers to the presence of tumor-specific DNA after cancer treatment, which may have a total addressable market (TAM) of over three million patients in the United States. Exact is also developing a colorectal cancer blood test which can reach 44 million Americans who need colorectal cancer screening.
h2 Strong Q3 2023 earnings and raised full-year 2023 guidance/h2
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On November 1, 2023, Exact Sciences reported a breakeven EPS, beating consensus analyst estimates for a loss of 47 cents by 47 cents. Revenues surged 20.1% to $628.34 million, beating $616.79 million consensus estimates. The company raised its full-year 2023 revenue guidance to $2.476 billion to $2.486 billion versus $2.46 billion consensus analyst estimates.
h2 Reraised revenue guidance/h2On January 8, 2024, Exact Sciences provided upside Q4 2023 revenue guidance of $645.5 million to $647.5 million (up 17% YoY) versus $631.48 million consensus analyst estimates. Full-year 2023 revenues should meet consensus analyst estimates at $2.83 billion. The company also submitted the final module of the next-gen Cologuard premarket approval application to the FDA. It also announced that CFO and Executive Vice President Jeff Elliot plans to step down.
The weekly candlestick chart for EXAS illustrates a head and shoulders pattern.
The left shoulder formed after peaking at $72.19 on January 30, 2023. After a pullback to $60.05, EXAS surged to a high of $100.77 on July 17, 2023, to form the head. Shares fell to $59.07 to form the neckline before coiling back to $77.42 for the right shoulder formation.
The weekly market structure low trigger is at $67.12. The neckline breakdown occurs below $58.10. The daily relative strength index (RSI) falls under the 50-band. Pullback support levels are at $62.62, $58.13, $50.79 and $45.89.
h2 Hologic Inc./h2Hologic (NASDAQ:HOLX) is a medical company that manufactures and supplies surgical, diagnostic and medical imaging products focused on women's health. It specializes in skeletal, gynecological and breast health products to treat diseases and illnesses. Hologic has four divisions: diagnostics, breast health, GYN surgical and skeletal health. The company was a benefactor during the COVID pandemic, supplying COVID tests. Still, normalization continues as the COVID business dries up, causing its year-over-year (YoY) revenue comps to look weaker than they are.
h2 Normalization from COVID continues/h2Hologic reported Q4 2023 EPS of 89 cents, beating consensus analyst estimates by five cents. Net income fell 24% to 90.6 million due to falling COVID-assays, causing GAAP margins to contract 80 bps to 14%.
Revenues fell 5/5% YoY to $945.3 million, beating consensus analyst estimates of $940 million. Organic revenue growth was 17.5% YoY, excluding COVID-19-related revenues.
h2 Upside guidance raise/h2On January 8, 2024, Hologic raised its fiscal Q1 2024 revenues to $1.01 billion, up from previous guidance of $960 million to $985 million), versus $979.29 million consensus analyst estimates.
The daily candlestick chart on HOLX indicates an ascending triangle pattern. The lower ascending trendline commenced at $64.02 on October 30, 2023 — the upper flat-top trendline formed at $73.05. HOLX is getting close to the apex point, where it will either break out through the flat-top or the ascending triangle. The daily market structure low (MSL) trigger is $70.29. Pullback support levels are at $70.29, $68.15, $65.55 and $64.02.
h2 Amicus Therapeutics Inc./h2Amicus Therapeutics Inc. (NASDAQ:FOLD), a commercial-stage biotech company, focuses on developing treatments for rare diseases. Its lead product is the FDA-approved treatment for Fabry disease called Galafold (migalastat). Fabry disease is a rare genetic lysosomal storage disorder. The company has multiple drugs in the pipeline in late-stage Phase 2 and Phase 3 clinical trials for diseases, including Hunter syndrome, Pompe disease, Alpha-1 antitrypsin deficiency and Niemann-Pick disease Type C.
h3 Beat and raise guidance/h3Amicus lost 7 cents per share, beating analyst estimates by a penny. Revenues soared 26.7% to $103.5 million, beating consensus analyst estimates of $102.3 million. The company is raising full-year Galafold revenue growth guidance to 16% to 18%. Non-GAAP operating expense guidance for 2023 was $330 million to $350 million.
h2 Reraising guidance/h2On January 8, 2024, Amicus raised full-year 2023 revenue guidance to $399.4 million, matching consensus analyst estimates. The company clarified its four strategic priorities in 2024, which include double-digit Galafold revenue growth, ensuring the successful launch of the Pombiliti and Opfolda combination, advancing ongoing studies to support medical and scientific leadership in Pomp and Fabry disease and achieving full-year non-GAAP profitability.
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