Exact Sciences (EXAS) to Post Q3 Earnings: What's in Store?

Zacks Equity Research

Exact Sciences Corporation EXAS is scheduled to report third-quarter 2019 results on Oct 29, after market close.

The company’s track record has been mixed so far, having delivered a positive surprise thrice in the trailing four quarters and missing the same once, the average positive earnings surprise being 20.97%. In the last reported quarter, Exact Sciences came up with a beat of 46.43%.

Shares of Exact Sciences have soared 52.9% in the year so far against the industry’s decrease of 5%.

Let’s see how things are shaping up for the upcoming quarterly results.

Factors to Consider

Exact Sciences’ top line primarily consists of laboratory service revenues generated from Cologuard, a non-invasive screening test for colorectal cancer. Cologuard test volume increased both year over year and sequentially in the second quarter of 2019, a trend that most likely continued in the third quarter as large number of healthcare providers ordered their first Cologuard test.

In September 2019, the FDA approved a label expansion of Cologuard, which can now be used in eligible average-risk individuals aged 45 years or older, expanding on its previous indication for 50 years or older.

Notably, the label expansion gave Cologuard a wider access to patient population, which increased its market share significantly. The product is likely to have performed well and contributed to significant revenues in the third quarter.

Key Developments

Meanwhile, in July 2019, Exact Sciences announced that it will acquire Genomic Health, Inc. GHDX for $2.8 billion to create a leading global cancer diagnostics company. The combined entity will offer two of the strongest and the fastest-growing brands in cancer diagnostics, namely Cologuard and Oncotype DX. The transaction is expected to close by 2019 end.

We expect management to provide an update on the buyout deal during the upcoming earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Exact Sciences this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Exact Sciences has an Earnings ESP of -0.82%.

Zacks Rank: Exact Sciences sports a Zacks Rank of 1, which increases the predictive power of ESP. However, its negative ESP leaves surprise prediction inconclusive.

Exact Sciences Corporation Price and EPS Surprise

Exact Sciences Corporation Price and EPS Surprise

Exact Sciences Corporation price-eps-surprise | Exact Sciences Corporation Quote

Stocks That Warrant a Look

Here are a few healthcare stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around.

Gilead Sciences, Inc. GILD has an Earnings ESP of +0.91% and a Zacks Rank #3. The company is scheduled to release results on Oct 24. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amgen, Inc. AMGN has an Earnings ESP of +0.50% and a Zacks Rank of 3. The company is scheduled to release results on Oct 29.

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