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.
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.