On Friday, TD Cowen’s analysts showed a positive outlook on Natera shares (NASDAQ:NTRA), increasing the price target from $195.00 to $200.00 while maintaining a Buy rating. According to InvestingPro data, analyst targets for Natera range from $169 to $251, with the company receiving a strong consensus recommendation of 1.52 (where 1 is Strong Buy). The analysts highlighted the company’s impressive performance, noting that Natera’s sales were 13% higher than anticipated, partially due to a favorable prior period development. This growth was attributed to a 5% increase in core sales and an additional 8% from other favorable factors. InvestingPro data reveals the company’s remarkable revenue growth of 51.5% over the last twelve months, reaching $1.83 billion, with a strong financial health score rated as "GREAT."
Natera’s Signatera product demonstrated significant growth, with clinical volumes in the first quarter rising quarter-over-quarter to approximately 17,000, which is substantially higher than the expected 12,000. This represents a year-over-year increase of 52%, a development that is expected to be well-received by the market. The increase in Signatera’s clinical volumes comes as a particularly positive note against the backdrop of concerns about potential volume issues caused by weather-related disruptions that affected some of Natera’s peers.
Furthermore, Natera’s gross margins (GMs) exceeded expectations by 3%, or 1% after adjusting for favorable prior period developments. This beat in gross margins suggests a stronger operational performance than analysts had projected. InvestingPro shows the company maintains a healthy gross profit margin of 61.79%, while its current ratio of 3.87 indicates strong liquidity. Discover more insights about Natera and 1,400+ other stocks with InvestingPro’s comprehensive research reports. In response to the first quarter’s robust results, Natera has also revised its sales guidance upward, reflecting the company’s confidence in sustaining its growth momentum.
In addition to the raised sales forecast, Natera has indicated an increase in operational expenses (OpEx). This adjustment suggests that the company is possibly gearing up for further expansion or investment in its product offerings, although the specifics of the increased expenditures were not detailed in the analyst’s comments.
The positive adjustments by TD Cowen come in the wake of Natera’s solid quarterly outcomes, which appear to set a strong foundation for the company’s future growth prospects. The raised price target is indicative of the firm’s belief in Natera’s continued upward trajectory in the market. This optimism is reflected in the stock’s impressive 70.14% return over the past year, though InvestingPro’s Fair Value analysis suggests the stock may be currently overvalued.
In other recent news, Natera Inc . announced its Q1 2025 earnings, reporting an earnings per share (EPS) of -$0.50, which exceeded analysts’ expectations of -$0.64. The company’s revenue reached $522 million, representing a 37% increase year-over-year, and as a result, Natera has raised its full-year revenue guidance to between $1.94 billion and $2.02 billion. The company is focusing on expanding its market presence in oncology and organ health testing, with strategic investments in innovation and market penetration. Natera also reported a gross margin of 63%, with cash generation of $23 million during the quarter. Analysts have noted the company’s strong performance and potential for future growth, particularly in the oncology segment, where Natera continues to expand its test offerings and clinical data presentations. The company processed 855,000 tests in the quarter and aims for long-term gross margins above 70%. Natera’s strategic focus and recent developments position it as a key player in the oncology market, with continued growth anticipated through volume and pricing improvements.
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