After reporting strong first-quarter results, shares of Exact Sciences (EXAS -1.14%), a cancer-focused diagnostics company, jumped 13% as of 12:30 p.m. EDT on Friday.
Here's a look at the headline numbers from the quarter:
- Revenue jumped 87% to $90.3 million. That blew past the $87 million in revenue that Wall Street had predicted.
- Testing volume jumped 87% year over year to 186,000. That was ahead of management's guidance range.
- 9,000 new prescribers ordered a Cologuard test during the quarter.
- Average cost per test fell 28% to $123.
- Net loss was $39.4 million, or $0.33 per share. That was lower than the $0.37 loss that analysts were expecting.
- Cash balance at quarter end was $1 billion.
Management also reaffirmed that it expects revenue in 2018 to land between $420 million and $430 million.
Given the better-than-expected results, it isn't hard to figure out why traders are feeling giddy.
These quarterly results reaffirm that Exact Sciences remains in hypergrowth mode. With a huge market opportunity ahead, shareholders should expect this company's top line to move higher at a breakneck pace for the foreseeable future.
But are shares a buy at today's egregious valuation? That's a tough call, but my view is that the opportunity here is large enough to justify a small purchase. However, this remains a speculative stock that has its fair share of detractors, so potential investors should brace themselves for extreme volatility.