Natera: Leading MRD Position, Expanding Margins, and Premium Valuation Support Buy Rating and $300 Target

Patrick B Donnelly, an analyst from Citi, has initiated a new Buy rating on Natera (NTRA).

Patrick B Donnelly has given his Buy rating due to a combination of factors related to Natera’s competitive position and financial trajectory. He emphasizes that Natera holds a leading role in the minimal residual disease (MRD) testing market through its Signatera assay, which has expanded from colorectal cancer into additional tumor types and secured strong reimbursement from Medicare and commercial payers. This leadership, combined with ongoing adoption and higher average selling prices as coverage broadens, underpins his view that the company has a long runway for continued growth in oncology alongside its established Women’s and Organ Health businesses.

Donnelly also highlights that Natera’s margins are improving meaningfully, with gross margin rising substantially over the last several years and management targeting further expansion above 70% as scale and cost efficiencies build. He believes the company can sustain double-digit revenue growth while simultaneously enhancing profitability, even as it continues to invest to support future opportunities. Based on these dynamics, he applies a premium valuation multiple to forward sales versus other specialty diagnostics peers and arrives at a $300 target price, which implies attractive upside from current levels and supports his Buy recommendation.

In another report released yesterday, Piper Sandler also maintained a Buy rating on the stock with a $230.00 price target.

Based on the recent corporate insider activity of 197 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NTRA in relation to earlier this year.