Please ensure Javascript is enabled for purposes of website accessibility

Why Invitae Corporation Is Tanking Today

By Brian Feroldi – Nov 8, 2018 at 3:15PM

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

Shares cool off after an amazing year-to-date run, even though the genetic testing specialist reported upbeat third-quarter results.

What happened

Shares of Invitae (NVTA -4.54%), a company focused on genetic testing, fell 12% as 3 p.m. EST on Thursday. The decline can be traced to the release of third-quarter results.

So what

Here's an overview of the headline numbers from the period:

  • Revenue jumped 106% to $37.4 million. That figure was ahead of what Wall Street was expecting.
  • Net loss was $31.7 million, or $0.45 per share. This was better than the $0.47 loss that market-watchers were expecting.
  • Cash burn was $18.4 million. 
  • Cash balance at quarter-end was $134.6 million thanks to a recently completed equity offering.   

The strong results enabled Invitae to raise guidance for the full year:

  • Volume is expected to exceed 285,000 samples during the year. That's a 10,000 bump from its prior outlook.
  • Revenue guidance was raised by $5 million to a new range of $140 million to $145 million. For context, Wall Street was only expecting $138.5 million in total revenue. 
Team of workers with smiles on their faces

Image source: Getty Images.

Despite reporting expectation-topping results and issuing bullish guidance, shares still swooned today. The fall isn't all that surprising when considering that Invitae's shares had been up more than 60% since the start of the year prior to today's release.

Now what

Investors couldn't have asked for much more in Invitae's third-quarter results. Revenue growth was strong, cash burn was low, and guidance was raised for the year. That's a trifecta that usually causes traders to cheer. However, given the stock's red-hot performance as of late, the sell-off isn't too surprising.

Overall, Invitae continues to execute against its growth plan. If you were bullish on the stock yesterday, I find no reason to change your tune today. 

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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

HOW THE MOTLEY FOOL CAN HELP YOU

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

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.