Please ensure Javascript is enabled for purposes of website accessibility

Exact Sciences Withdraws Guidance, Shares Still Jump 32%

By Brian Orelli, PhD - Mar 19, 2020 at 6:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The growth stock has become a value stock.

Exact Sciences (EXAS 4.42%) was expecting revenue of $1.61 million to $1.645 billion during 2020, including revenue from its screening test of $1.125 billion to $1.15 billion and its precision oncology tests of $485 million $495 million. Now Exact Sciences isn't so sure -- or dare I say, it isn't being very exact.

On Thursday, the healthcare company withdrew its guidance "due to the rapidly evolving environment and continued uncertainties from the impact of COVID-19," the disease caused by the novel coronavirus. And its shares proceeded to go up 32% over the course of the day, besting the S&P 500's modest 0.5% gain.

Uncertainty usually drives shares down, not up, but investors apparently think Exact Sciences has gotten cheap enough to justify buying. Even with today's run-up, shares are still only half of what they were a month ago.

Doctor working at a computer

Image source: Getty Images.

Part of today's excitement could be tied to the Centers for Medicare and Medicaid Services' request that hospitals suspend all non-essential surgeries, allowing the resources to be available for patients with COVID-19. The request is likely to reduce the number of colonoscopies used to detect colon cancer, which might drive doctors to recommend Exact Sciences' Cologuard, an at-home colon cancer test that uses a stool sample.

The company's precision oncology division, which came over through its acquisition of Genomic Health, shouldn't be affected too much by the COVID-19 pandemic. People will still, unfortunately, get cancer, and doctors will still need Exact Sciences' tests to figure out the best treatment for their patients.

That said, Exact Sciences may still struggle this quarter as people avoid doctors for a few weeks. Nevertheless, long-term investors who are willing to accept the volatility could benefit from the lower price, even after today's run-up.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Exact Sciences Corporation Stock Quote
Exact Sciences Corporation
EXAS
$41.13 (4.42%) $1.74

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.