Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of EXACT Sciences (NASDAQ:EXAS), a molecular diagnostics company focused on developing products designed for early detection of colorectal cancer and pre-cancer, dropped as much as 10% this morning after the company reported its first-quarter results. Shares have since rebounded in a big way, and are now up 3%.

So what: For the quarter, EXACT reported total revenue of $0.3 million, down 70% from the $1 million reported in the year-ago quarter. This revenue consists of a non-cash upfront license fee paid by Genzyme, which the company has been amortizing over a five-year period that ended in Jan. 2014. Net loss increased to $16.1 million, or $0.23 per share, from $10.9 million, or $0.17 per share in the year-prior period. By comparison, Wall Street had been expecting a narrower loss of just $0.19 per share.

Now what: Clinical-stage companies rarely get beat up too badly come earnings time because Wall Street and investors have tied most of their valuation to a company's pipeline. In EXACT Sciences' case, its future lies with its Cologuard colon cancer screening diagnostic. While some investors were a bit disappointed with Cologuard's discovery of pre-cancerous lesions (just 42% sensitivity), it appears to be a far and away better option that the most commonly used fecal immunochemical screening test in use now. Keep in mind, if approved, this wouldn't replace a traditional colonoscopy by any means, but would be an adjuvant diagnostic tool to a colonoscopy if the results came back with a positive indication. Overall, I believe EXACT's product could have a bright future, and I would certainly suggest getting this stock on your watchlist.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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