What happened
Shares of Invitae (NVTA -91.58%) had fallen 6.6% as of 3:13 p.m. EST on Wednesday. The medical genetics company didn't announce any news that would cause the stock to drop. Instead, Invitae's decline today appears to be part of a broader sell-off of high-growth stocks, with the Nasdaq Composite Index falling 2%.
So what
The best thing that investors can do on days like today is...nothing. Growth stocks like Invitae that trade at premium valuations tend to be highly volatile. Solid business execution combined with great long-term prospects, however, outweigh short-term volatility.
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Invitae continues to execute well. The company posted year-over-year revenue growth of 51% in the fourth quarter, thanks in large part to its acquisition of ArcherDX. This result beat the Wall Street consensus estimate.
The medical genetics company's growth prospects also are significant. Invitae projects that its total addressable market for genetic testing tops $150 billion. It thinks that the market for genetic testing in older individuals, including cancer screening and therapy selection, is especially promising.
Now what
Invitae expects to generate annual revenue growth of 50% to 60% over the next few years. If the company can achieve this level of growth, today's drop will only be a blip in an overall upward trend.
