Why Exact Sciences Stock Slumped Wednesday
Exact Sciences (NASDAQ: EXAS), the maker of the noninvasive colon cancer diagnostic Cologuard, posted better-than-expected financial results for the second quarter of 2023 after the closing bell Tuesday. The market, for its part, wasn't impressed. Exact Sciences' stock was down by 11.2% on sky-high volume as of 3:30 p.m. ET Wednesday afternoon.
Although 2023 Q2 revenue jumped 19% year over year to $622 million, Wall Street apparently wanted even more growth to justify the biotech's stately valuation. To wit, the biotech's shares have consistently traded at well over 6 times 2024 projected revenue, which is among the highest valuations within the mid-cap healthcare stock space.
Exact's Q2 report was overall quite impressive. Besides its double-digit rise in revenue, the company raised its 2023 full-year revenue guidance by $54 million. Its net loss for the second quarter also shrank by a noteworthy 51% to $81 million. Rumors swirled immediately following this earnings release that some analysts were hoping to see an even smaller quarterly net loss, but a 51% reduction is substantial nonetheless.
Source Fool.com
