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What Especially Stood Out From Invitae's Q3 Results

By Keith Speights and Brian Orelli, PhD – Nov 19, 2021 at 8:01AM

Key Points

  • Invitae reported solid revenue growth in the third quarter.
  • However, the company's operating expenses increased at an even faster rate than sales.
  • Invitae's cash stockpile should carry the company for another couple of years.

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The big news from Invitae's Q3 update was a worsening bottom line.

Invitae (NVTA -4.84%) announced its third-quarter results on Nov. 8, 2021. In this Motley Fool Live video recorded on Nov. 10, Motley Fool contributors Keith Speights and Brian Orelli discuss what especially stood out in the company's Q3 update.

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Keith Speights: Well, Brian, there's another Motley Fool genomics favorite, Invitae. Ticker there is NVTA. It also announced its Q3 results on Monday of this week. What especially stood out, in your view, with Invitae's latest update?

Brian Orelli: Unlike Fulgent, Invitae is having a hard time finding a niche in its genetic testing, at least in growing substantially as fast as Fulgent does.

Revenue was up 66%, billable tests volume was up 89%. Operating expenses more than doubled. Anytime you have in your expenses go up more than your revenue, that's not going to do the right thing for your earnings.

Shares fell 22% after earnings, I think largely based on the fact that their profits are getting worse.

They have 1.25 billion in the bank. Then their cash brought in for the quarter, excluding the amount they paid for acquisitions was 148.1 million. That's a current run rate of over two years of cash.

I think they are in OK shape right now. But that's something to look out for is how fast can they grow the revenue versus how fast are they growing their operating expenses?

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Fulgent Genetics, Inc. and Invitae. The Motley Fool has a disclosure policy.

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