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Natera (NTRA)
NASDAQ:NTRA
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Natera
(NASDAQ:NTRA)68Neutral
Positive Factors
Financial Performance
The company achieved positive operating cash flows for the fourth consecutive quarter.
Market Position
Natera Inc. is a leader in the $20B MRD market with a strong base in NIPT and carrier screening.
Negative Factors
Operating Expenses
Opex guidance came in above expectations due to new products and sales channel investments.
Natera (NTRA) vs. S&P 500 (SPY)
Market Cap
$19.35B
Dividend YieldN/A
Average Volume (3M)1.84M
Price to Earnings (P/E)―
Beta (1Y)1.50
Revenue Growth56.75%
EPS Growth59.77%
CountryUS
Employees3,293
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)-1.53
Shares Outstanding135,186,190
10 Day Avg. Volume2,882,724
30 Day Avg. Volume1,842,529
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)12.63
Price to Cash Flow (P/CF)93.40
P/FCF Ratio125.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$194.27Price Target Upside36.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
Natera Business Overview & Revenue Model
Company DescriptionNatera, Inc. engages in the discovery, development, and commercialization of genetic testing services. It offers Panorama Non-Invasive Prenatal Test, Horizon Carrier Screening, Spectrum Pre-implantation Genetic Screening and Spectrum Pre-implantation Genetic Diagnosis, Anora Products of Conception and Non-Invasive Paternity Testing. The company was founded by Matthew Rabinowitz and Jonathan Sheena in November 2003 and is headquartered in San Carlos, CA.
How the Company Makes MoneyNatera generates revenue primarily through the sale of its genetic testing services. The company's key revenue streams include payments for its non-invasive prenatal tests, carrier screening tests, and oncology test kits. Natera partners with healthcare providers, clinics, and hospitals to offer these tests directly to patients. The company also collaborates with pharmaceutical companies and research institutions for clinical trials and research studies, which contributes to its revenue. Additionally, Natera's tests are increasingly being covered by insurance plans, which boosts accessibility and customer adoption, thereby enhancing its earnings.
Natera Financial Statement Overview
Summary
Natera shows robust revenue growth and a strong balance sheet with low leverage. However, persistent net losses and negative profit margins highlight challenges in achieving profitability. Positive cash flow is a promising sign, but profitability remains a key focus.Income Statement
Natera has demonstrated impressive revenue growth, with a revenue increase from $391.0 million in 2020 to $1.70 billion in 2024, reflecting strong market demand for its services. The gross profit margin for 2024 of 60.37% is healthy, indicating efficient cost management relative to revenue. However, the net profit margin remains negative due to consistent net losses, signaling that while revenue is growing, profitability has yet to be achieved. The EBIT and EBITDA margins are also negative, highlighting ongoing operational challenges.75
Positive
Balance Sheet
The company's balance sheet shows a strong equity position with an equity ratio of 71.96% in 2024, reflecting a solid capital structure and reduced financial risk. The debt-to-equity ratio stands at 0.15, indicating low leverage and a conservative approach to debt. Despite these strengths, the ongoing net losses impact the return on equity, which remains negative, suggesting the need for improved profitability to enhance shareholder returns.72
Positive
Cash Flow
Natera's cash flow has improved with a positive operating cash flow of $135.7 million in 2024, a significant turnaround from previous negative cash flows. The free cash flow is also positive at $69.2 million, indicating improved cash generation capabilities. However, the free cash flow to net income ratio is less favorable due to persistent net losses, suggesting room for further improvement in cash efficiency relative to earnings.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.70B | 1.08B | 820.22M | 625.49M | 391.00M | Gross Profit |
| 1.02B | 492.74M | 363.97M | 307.07M | 187.38M | EBIT |
| -222.29M | -446.25M | -541.04M | -468.17M | -216.28M | EBITDA |
| -148.08M | -383.28M | -520.80M | -451.54M | -205.95M | Net Income Common Stockholders |
| -190.43M | -434.80M | -547.80M | -471.72M | -229.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 968.28M | 878.98M | 898.31M | 914.28M | 737.27M | Total Assets |
| 1.66B | 1.44B | 1.39B | 1.24B | 932.15M | Total Debt |
| 187.12M | 441.99M | 438.58M | 391.48M | 273.79M | Net Debt |
| -758.47M | -200.10M | -27.43M | 307.10M | 225.13M | Total Liabilities |
| 465.31M | 676.37M | 688.73M | 583.18M | 445.92M | Stockholders Equity |
| 1.20B | 765.33M | 705.74M | 653.30M | 486.24M |
| Cash Flow | Free Cash Flow | |||
| 69.24M | -286.15M | -479.20M | -376.27M | -202.12M | Operating Cash Flow |
| 135.66M | -246.96M | -431.50M | -335.24M | -182.51M | Investing Cash Flow |
| 137.62M | 168.50M | 330.34M | -205.19M | -331.46M | Financing Cash Flow |
| 30.20M | 254.46M | 482.64M | 576.19M | 500.85M |
Natera Technical Analysis
Negative
142.35
Price Trends
166.07
Negative
155.47
Negative
134.60
Positive
Market Momentum
-5.51
Positive
28.15
Positive
14.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRA, the sentiment is Negative. The current price of 142.35 is below the 20-day moving average (MA) of 165.11, below the 50-day MA of 166.07, and above the 200-day MA of 134.60, indicating a neutral trend. The MACD of -5.51 indicates Positive momentum. The RSI at 28.15 is Positive, neither overbought nor oversold. The STOCH value of 14.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTRA.
Natera Risk Analysis
Natera disclosed 59 risk factors in its most recent earnings report. Natera reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Natera Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $19.35B | ― | -19.42% | ― | 56.75% | 59.77% | |
68 Neutral | $1.19B | 20.77 | 13.89% | ― | 19.07% | ― | |
53 Neutral | $8.83B | ― | -37.09% | ― | 10.37% | -389.98% | |
53 Neutral | $5.12B | ― | 312.48% | ― | 31.04% | 16.91% | |
51 Neutral | $976.81M | ― | -15.85% | ― | 12.15% | 61.33% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
49 Neutral | $13.45B | ― | -51.54% | ― | -2.93% | -4.69% |
* Healthcare Sector Average
Performance Comparison
NTRA
Natera
142.35
54.73
62.46%
EXAS
Exact Sciences
48.78
-9.72
-16.62%
ILMN
Illumina
84.89
-46.00
-35.14%
MYGN
Myriad Genetics
10.42
-11.81
-53.13%
CDNA
CareDx
20.30
8.70
75.00%
GH
Guardant Health
41.48
22.71
120.99%
Natera Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -9.11% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, significant advancements in product coverage, and successful data initiatives. While there are some challenges, particularly in the immediate financial impact of new legislative measures and product introductions, the overall outlook remains positive with substantial growth opportunities in oncology and women's health.Highlights
Record Revenue Growth
Natera reported Q4 revenues of $476 million, up 53% year-on-year, exceeding the pre-announcement figure by $4 million.
Significant Volume Increase
Volumes rose by 26% compared to Q4 of the previous year, with notable growth in the Signatera unit.
Improved Gross Margins
Gross margins increased to 63% in Q4 from 51% a year ago, reflecting improvements in COGS and pricing.
Positive Cash Flow
Natera generated $46 million in cash flow in Q4, contributing to a total of $86 million for the full year.
Expansion in Oncology Coverage
Medicare coverage expanded for Signatera in non-small cell lung cancer, stages 1-3, enhancing access for patients.
Advancements in Organ Health
Progress in organ health with upcoming studies like PEDAL and DEFINE expected to impact kidney and heart transplant monitoring.
Data-Driven Achievements
Signed over $10 million in data-related contracts in early 2025, showcasing momentum in leveraging clinical and genomic data.
Lowlights
Slow Biomarker Bill Impact
The expected gradual improvement in ASPs from biomarker legislation indicates a slower-than-anticipated impact on revenue.
Potential Gross Margin Impact from New Products
The introduction of new MRD products could temporarily impact gross margins if uptake exceeds expectations.
Company Guidance
During the 2024 Fourth Quarter Financial Results Conference Call, Natera provided extensive guidance on its future outlook. The company reported Q4 revenues of $476 million, marking a 53% year-on-year increase, with volumes up 26%. Gross margins significantly improved to 63% compared to 51% the previous year. The company generated approximately $46 million in cash flow in Q4, contributing to a total of $86 million for the year. For 2025, Natera projects revenues between $1.87 billion and $1.95 billion, with a focus on maintaining stable ASPs and achieving gross margin improvements above the 59% posted in Q4, excluding true-ups. The company's robust R&D efforts, expected to continue growing, are primarily directed at its MRD product line and early cancer detection initiatives. Natera also highlighted the recent Medicare coverage expansion for its Signatera test in non-small cell lung cancer, and aspired to capitalize on increasing reimbursement for women's health and organ health services.Natera Corporate Events
Executive/Board Changes
Natera Aligns Executive Chairman’s Pay with Performance
Neutral
Dec 6, 2024
Natera, Inc. has updated its employment terms with Executive Chairman Matthew Rabinowitz, highlighting a performance-based compensation structure. The agreement features a salary linked to the CEO’s pay and includes potential bonuses and equity awards. In the event of termination, Rabinowitz will receive severance benefits including salary continuation and accelerated vesting of equity awards. This move underscores the company’s focus on aligning leadership incentives with performance outcomes.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.