What happened

Following first-quarter financial results that were better than expected, Exact Sciences' (NASDAQ:EXAS) shares are rocketing 25.6% higher at 12:00 p.m. EST today.

So what

Exact Sciences' Cologuard is the company's only commercial product, but sales of it are rising rapidly, and that's putting the company in a better position to turn a profit.

A rocket soars into outer space.

IMAGE SOURCE: GETTY IMAGES.

Colonoscopies remain the best way to determine a patient's risk of colon cancer, but Cologuard provides a lower-cost and less-invasive screening option, and that makes it appropriate for many patients who might otherwise avoid screening.

Cologuard's advantages appear to be resonating with doctors and patients, because in the first quarter, Exact Sciences performed Cologuard tests for 100,000 patients, up 150% from the same quarter last year. The average price per test fell 25% to $170, but volume growth more than made up for lower prices, and as a result, revenue reached $48.4 million in the quarter, up 227% year over year.

Spending continues to outstrip revenue, but the ratio of expenses to sales is improving and the company's net loss of $34.9 million in the quarter was 26.5% better than last year. 

Now what

Exact Sciences' management thinks it can complete 115,000 Cologuard tests in the second quarter and at least 470,000 tests in 2017. Previously, management was estimating it would perform roughly 415,000 tests this year. In 2016, the company completed 244,000 tests.

Growing test volume has management estimating full-year sales of between $195 million to $205 million, which is up from prior estimates for between $170 million to $180 million. That's probably not going to be enough to get this company into the black (operating expenses totaled $223 million in 2016), but it does suggest the company's going to make a lot of headway this year toward profitability.

Although the fact that Exact Sciences is still losing money makes it a bit of a risky stock to buy, I think this company's still got a lot of opportunity to grow because of aging baby boomers, and if I'm right, it's not unreasonable to think this company's shares are going to continue their winning ways.

Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.