Natera - Harkening Back To Its Heyday

(RTTNews) - Shares of Natera Inc. (NTRA) have made a remarkable comeback, surging past the $120 mark - a level reminiscent of their past peak performance.

Natera is a diagnostics company offering cell-free DNA testing, with a focus on oncology, women's health, and organ health.

Cell-free DNA, or cfDNA in short, refers to small fragments of DNA that are released from normal cells and diseased cells into the blood. The cell-free DNA testing is of use in identifying genomic variants associated with a hereditary or genetic disorder and for the detection and characterization of some cancers and to monitor cancer therapy.

Panorama, a non-invasive prenatal test, or NIPT, Horizon Carrier Screening, or HCS, test, Spectrum Preimplantation Genetics, Anora miscarriage test, Vistara single-gene NIPT, Empower hereditary cancer screening test, Signatera molecular residual disease test for oncology applications, and Prospera organ transplant assessment tests are some of the company's product offerings.

The company reported Q2, 2024, financial results recently that exceeded its expectations with incredibly strong performance in volume, revenue and gross margin.

Q2 Recap

Revenues were $413.4 million in the second quarter of 2024 compared to $261.4 million in the second quarter of 2023, an increase of 58.1%, driven by higher volume and average selling price improvements related to tests, among others.

Natera processed approximately 760,300 tests in the second quarter of 2024, compared to roughly 617,200 tests processed in the year-ago quarter.

Gross profit for the second quarter of 2024 increased to $243.2 million from $118.3 million in the year-earlier period, representing a gross margin of 58.8% and 45.2%, respectively.

Net loss shrunk to $37.5 million or $0.30 per share in the second quarter of 2024, from $110.8 million or $0.97 per share for the same period in 2023.

The company ended June 30, 2024, with approximately $887.1 million in cash, cash equivalents, short-term investments and restricted cash.

The Path Forward

Looking ahead, Natera now anticipates 2024 total revenue to be in the range of $1.49 billion to $1.52 billion and gross margin to be approximately 54% to 56%. The total revenue was $1.08 billion and gross margin was 45.5% in 2023.

This marks the second time the company has increased both its revenue and gross margin guidance for 2024.

Natera made its debut on the Nasdaq Global Select Market, under the ticker symbol NTRA, on July 1, 2015, priced at $18.00 per share.

We highlighted Natera in our report "Natera - Will Heydays Be Back?" on Dec.21, 2022, when the stock was trading around $41.75.

With NTRA closing yesterday's trading at $122.61, it is evident that the stock has reclaimed its glorious past. This begs the question: Is there still room for further growth, or has it already reached its peak?