Please ensure Javascript is enabled for purposes of website accessibility

Natera, Inc. Surged 20% Higher in December. Here's Why.

By Brian Feroldi - Jan 8, 2016 at 2:04PM

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

News of the company gaining a foothold overseas puts investors in a good mood.

What: Investors in Natera (NTRA 2.95%), a company focused on non-invasive genetic testing, finally had a month to celebrate. The company's shares soared 20% higher in December, according to data from S&P Capital IQ

So what: News broke during the month that MedGenome, a clinical genomic testing company based in India, is now performing the company's Panorama non-invasive prenatal test in its genetics laboratory in Bangalore. This represents Natera's first entrance into India, and investors cheered.

Now what: Natera has been a rough stock to own. Shares are down more than 50% since they first hit the public markets.

NTRA Chart

The sell-off appears to have been caused by pricing pressure concerns. Although the company is successfully growing its testing volume, reimbursement issues have prevented that growth from translating into revenue. The company also faces some serious competition in the space as it is competes directly with Illumina's (ILMN -8.40%) Verinata Health division. Like Natera, Illumina also offers prenatal testing services that are used to spot chromosomal abnormalities. Competing with a well-financed giant like Ilumina is no small task, so investors should keep a close eye on this rivalry.

Until Natera can prove that it can translate testing volume growth into revenue growth, I'm content to watch this story unfold from the sidelines.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends Illumina. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

Natera, Inc. Stock Quote
Natera, Inc.
NTRA
$55.17 (2.95%) $1.58
Illumina, Inc. Stock Quote
Illumina, Inc.
ILMN
$208.32 (-8.40%) $-19.11

*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
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

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.