One of my favorite stocks for 2021 is Exact Sciences $EXAS.
1) Here's a quick look under the hood:
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#Investing #StockMarket #stockpicks2021
1) Here's a quick look under the hood:
👇👇👇
#Investing #StockMarket #stockpicks2021
2) ➡️Listing: NASDAQ
➡️Segment: Cancer diagnostics, Colon Cancer focus
➡️Mkt Cap: $20B
➡️Segment: Cancer diagnostics, Colon Cancer focus
➡️Mkt Cap: $20B
3) Elevator pitch: ‘Colon cancer no.2 cause of death in USA – 53,200 in 2020. ‘Cologuard’ allows early screening (noninvasive) to identify & treat before cancer becomes a problem for those 45+ (94% detection rate). Cheaper/easier to administer than the alternative (colonoscopy)'.
4) Revenues: EXAS Revenue grew at 110% average per annum from 2016 - 2019.
Taking a conservative future growth rate (44% year on year, immature market), it’s reasonable to expect EXAS to reach $3.8B in revenue by 2023 end 📈:
Taking a conservative future growth rate (44% year on year, immature market), it’s reasonable to expect EXAS to reach $3.8B in revenue by 2023 end 📈:
5) Margins & Profitability: EXAS offers an impressive (and improving) Gross Margin of 75.4%✅.
Per all good growth companies, Operating Margin is showing significant improvement suggesting profitability is not too far away, while P/S is very reasonable 👇👇👇
Per all good growth companies, Operating Margin is showing significant improvement suggesting profitability is not too far away, while P/S is very reasonable 👇👇👇
6) Share Price: EXAS SP action has a volatile history. High valuations were the norm during the past 5 years (P/S of 550 in 2014!).
In 2020, SP was +50% YOY and +126% from the March low. Continued ‘higher lows’ observed in Q4, supported by blowout earnings reported in Q3 🔥:
In 2020, SP was +50% YOY and +126% from the March low. Continued ‘higher lows’ observed in Q4, supported by blowout earnings reported in Q3 🔥:
7) Runway 🛫: Potential addressable market is big, giving the company a long runway.
Adoption of non-invasive screening is early and the company continues to diversify into other screening areas to include blood-based assessment for prostate and breast cancers.
Adoption of non-invasive screening is early and the company continues to diversify into other screening areas to include blood-based assessment for prostate and breast cancers.
8) Runway Cont'd: Obvious synergies with Telehealth exist given this is a ‘from home’ service.
For the core product, there are 46M Americans unscreened today, giving plenty of scope for top line growth and market share gain:
For the core product, there are 46M Americans unscreened today, giving plenty of scope for top line growth and market share gain:
9) Prediction: With a reasonable margin of safety (50% of historical Revenue growth rate, share dilution and P/S values):
⭐️Target of $280 per share at 2023 end is reasonable
(+111% on today’s price of $132.5)
⭐️Target of $280 per share at 2023 end is reasonable
(+111% on today’s price of $132.5)
10) Prediction cont'd: Should revenues match actual historical performance (high case):
⭐️Target of $561 per share at 2023 end is reasonable. (+324% on today’s price of $132.5)
⬇️⬇️⬇️
⭐️Target of $561 per share at 2023 end is reasonable. (+324% on today’s price of $132.5)
⬇️⬇️⬇️
11) Conclusion: Net buyer of EXAS at current price levels.
Current cost basis $120 per share, 4.9% of my portfolio.
EXAS should flourish/continue to disrupt traditional cancer screening market, particularly if/when the Covid 19 pandemic eases.
Current cost basis $120 per share, 4.9% of my portfolio.
EXAS should flourish/continue to disrupt traditional cancer screening market, particularly if/when the Covid 19 pandemic eases.
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