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Why Invitae Corporation Is Tanking Today

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

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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.

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