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Natera (NTRA)
NASDAQ:NTRA
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Natera
(NASDAQ:NTRA)
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Rating:62Neutral
Price Target:
$212.00
▲(5.91% Upside)
Action:DowngradedDate:03/03/26
The score reflects improving fundamentals (strong growth, rising margins, stronger balance sheet, and positive cash generation) and a positive forward outlook from management guidance. These are offset by weak technical momentum (downtrend signals) and limited support from traditional valuation metrics due to ongoing losses and no dividend.
Positive Factors
Revenue growth & test volume
Sustained multi-year revenue expansion and higher test volumes show deepening clinical adoption across oncology, women’s health and organ health. Durable volume scale supports recurring lab-service economics, expands addressable market penetration, and provides a base to leverage fixed costs over time.
Margin expansion and improving unit economics
Material gross-margin improvement reflects COGS efficiencies and favorable product mix, indicating improving unit economics. Sustained margins in the low-to-mid 60s give room for investment in R&D and commercialization while moving toward profitability if revenue growth persists and one-time items fade.
Improving cash generation and stronger balance sheet
The shift to positive operating and free cash flow, together with a >$1B cash balance and materially lower leverage, meaningfully improves funding flexibility. This durable cash profile supports ongoing clinical trials, targeted M&A and commercialization without reliance on frequent equity or debt raises.
Negative Factors
Still operating at a loss / negative ROE
Despite clear progress, the company remains unprofitable and posts negative returns on equity. Persistent losses mean shareholder value recovery depends on converting margin gains and revenue scale into sustained positive operating income, which remains an execution and timing risk over the coming months.
Reimbursement and coverage dependency
A large share of volumes lacks broad payer coverage, making future ASP and margin improvements contingent on MolDX/Medicare and commercial reimbursement decisions. Coverage outcomes are structural bottlenecks that can delay revenue realization and constrain pricing power for quarters to come.
Dependence on non-recurring items (true-ups) and recent cash inflection
Part of the recent margin and cash strength was supported by sizeable one-time true-ups and quarter-specific tailwinds. The cash-flow inflection is relatively recent; if true-ups and pharma-tail contributions normalize, reported margins and cash generation could be weaker, stressing near-term durability.
Natera (NTRA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.37B
Dividend YieldN/A
Average Volume (3M)1.05M
Price to Earnings (P/E)―
Beta (1Y)1.05
Revenue Growth38.17%
EPS Growth-28.77%
CountryUS
Employees4,424
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.36
Shares Outstanding141,731,250
10 Day Avg. Volume1,016,752
30 Day Avg. Volume1,051,826
Financial Highlights & Ratios
PEG Ratio230.22
Price to Book (P/B)18.29
Price to Sales (P/S)13.58
P/FCF Ratio287.05
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue11.87
Enterprise Value/Gross Profit18.31
Enterprise Value/Ebitda-106.16
Forecast
1Y Price Target
$265.14Price Target Upside32.46% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)-1.81
Revenue Forecast (FY)$2.66B
Natera Business Overview & Revenue Model
Company DescriptionNatera, Inc., a diagnostics company, develops and commercializes molecular testing services worldwide. It offers Panorama, a non-invasive prenatal test that screens for chromosomal abnormalities of a fetus with a blood draw from the mother, as well as twin pregnancies for zygosity; Vistara, a single-gene mutations screening test to identify single-gene disorder; Horizon carrier screening to determine carrier status for various genetic diseases; and Spectrum to identify chromosomal anomalies or inherited genetic conditions during an in vitro fertilization cycle. The company also provides Anora miscarriage test products to analyze fetal chromosomes to understand the cause of miscarriage; and non-invasive paternity testing products to determine paternity by gestation using a blood draw from the pregnant mother and alleged father. In addition, it offers Constellation, a cloud-based software product that enables laboratory customers to gain access through the cloud to the company's algorithms and bioinformatics in order to validate and launch tests; Signatera, a circulating tumor DNA technology that screen for a generic set of mutations independent of an individual's tumor; and Prospera used to assess organ transplant rejection. The company offers products through its direct sales force, as well as through a network of approximately 100 laboratory and distribution partners. It has a partnership agreement with BGI Genomics Co., Ltd. to develop, manufacture, and commercialize NGS-based genetic testing assays; and Foundation Medicine, Inc. to develop and commercialize personalized circulating tumor DNA monitoring assays. The company was formerly known as Gene Security Network, Inc. and changed its name to Natera, Inc. in 2012. Natera, Inc. was founded in 2003 and is based in Austin, Texas.
How the Company Makes MoneyNatera generates revenue primarily through the sale of its genetic testing services, which include prenatal testing, carrier screening, and oncology testing. The company operates a business model centered on laboratory services, where it processes samples and provides test results to healthcare providers and patients. Key revenue streams include direct sales of tests, reimbursement from insurance companies, and partnerships with healthcare organizations that enhance its market reach. Natera has also established collaborations with pharmaceutical companies for companion diagnostic testing and clinical trials, contributing to its revenue. The company's focus on expanding its testing portfolio and increasing utilization rates in its core markets plays a significant role in driving growth and earnings.
Natera Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial achievements: record testing volumes, robust 40% YoY revenue growth, materially improved gross margins (66.9% reported; 63.7% organic), improved collections (DSO down to 47 days), >$107M cash flow for 2025, and a clear product and clinical momentum (Signatera, Latitude submission, phased variants, Fetal Focus, Prospera trials). Management provided confident 2026 guidance (revenue $2.62B–$2.7B; gross margin 63%–65%) while acknowledging a few nonrecurring Q4 tailwinds and the ongoing dependency on reimbursement expansion for further ASP/margin upside. Risks called out include one-time accounting benefits, potential non-repeatability of some Q4 drivers, and the need for broader MolDX/Medicare coverage for a subset of indications. Overall, the positives (strong growth, margin expansion, cash generation, major product/technology advances and clinical evidence) substantially outweigh the identified risks and caveats.Q4-2025 Updates
Positive Updates
Strong Volume and MRD Adoption
Processed ~924,000 tests in Q4 2025; record MRD clinical unit volume with 225,000 MRD tests in Q4. MRD clinical units grew ~56% year-over-year, and internal data estimates >50% of U.S. oncologists ordered a Signatera test in the quarter.
Robust Revenue Growth
Quarterly revenue of ~$666 million, approximately $6 million ahead of the January preannouncement and ~40% year-over-year revenue growth.
Record Gross Margin and Organic Margin Expansion
Reported gross margin of 66.9% in Q4; after removing revenue true-ups (~3% benefit), organic gross margin was 63.7%. Organic COGS efficiencies drove a sequential organic margin step-up of ~240 basis points versus Q3.
Strong Cash Generation and Balance Sheet
Generated over $107 million in cash flow in 2025 while increasing growth investments; ended with a strong balance sheet with >$1 billion in cash and securities.
Improved Working Capital / Collections
$60 million of revenue true-ups in Q4 consistent with preannouncement and DSO improved to 47 days versus 68 days in Q4 2024, reflecting accelerated cash collections and revenue cycle improvements.
2026 Financial Guidance with Continued Margin Focus
Initial 2026 guidance: revenue $2.62B–$2.70B (midpoint implying ~25% growth ex-true-ups relative to 2025), gross margin guidance 63%–65%, OpEx growth targeted ~9.5% at the midpoint with SG&A roughly stable and continued targeted R&D investments.
Product & Clinical Milestones — Tissue-Free MRD (Latitude) Submission
Submitted Latitude, a tissue-free MRD assay, to MolDX in colorectal cancer. GALAXY validation: hazard ratio 10 post-surgery and 31.9 in post-treatment surveillance; 84% longitudinal sensitivity, 97% sample-level specificity, and a 4.6-month median lead time ahead of imaging.
Technology Leap — Phased Variant Integration
Acquired and integrated phased variant technology (from Foresight). Analytically LOD95 ≈ 3 parts per 10 million and detection below 1 per 10 million; claimed 10–100x improved detection thresholds vs conventional approaches, expected to launch clinically this year and strengthen MRD sensitivity and pharma service offerings.
Significant Clinical & Publication Momentum
Multiple high-impact publications and conference milestones: IMvigor011 publication in NEJM; Fetal Focus EXPAND trial selected as an oral plenary at SMFM; strong set of bladder and head & neck MRD interventional data (e.g., SYNERGY trial showing 63% ORR and reduced high-grade toxicity).
Women's Health and Organ Health Progress
Launched 21-gene Fetal Focus single-gene NIPT (sensitivity 96%, specificity 98%) and reported meaningful new OB/GYN and MFM account traction. Organ health: Prospera enrollment completed for ACES-EMB (>300 patients) with readout mid-2027; lung study showed clinicians forgone 9-month surveillance biopsy in ~75% of patients without worse outcomes.
Signatera ASP and Pricing Momentum
Signatera average selling price (ASP) ~ $1,225 in Q4; Q4 saw ~ $20 uplift in ASP with guidance embedding roughly another $30 of ASP improvement over the near term (company previously expected an incremental $50 over time).
Negative Updates
One-Time Items and Non-Recurring Effects
Q4 net income was aided by a below-the-line deferred tax item related to the Foresight acquisition — a one-time benefit that is not indicative of recurring profitability.
Q4 Tailwinds May Not Be Fully Repeatable
Management cautioned that some drivers of Q4 outperformance (e.g., high-margin pharma contribution, higher reported-units-to-tests ratio, and true-up benefit) may not repeat each quarter, prompting conservative initial margin guidance for 2026.
Reimbursement & Coverage Dependency
A meaningful portion of current tests (~30%–35% cited as 'non-covered' bucket) are in indications not yet covered by Medicare; further ASP and margin upside depends on MolDX/Medicare and commercial coverage decisions that are in process but not guaranteed.
True-Ups Expected to Decline
Q4 included ~$60 million of true-ups that materially helped cash collections and reported margins; management expects true-ups as a percent of revenue to decline in 2026, which could reduce similar near-term tailwinds.
Product Launches Not Yet Fully Reimbursed
Several product launches (e.g., new MRD versions, genome/phase-variant offerings, and newly launched tests) are not yet broadly reimbursed; initial commercial uptake and margin contribution could be delayed until coverage expands.
Seasonality and Near-Term Variability in Women's Health
Women’s health exhibits seasonality (Q1 stronger, Q2 typically down), which introduces quarter-to-quarter revenue variability; guidance assumes mid-single-digit women’s health volume growth but seasonality may complicate near-term pacing.
Company Guidance
Management initiated 2026 guidance of $2.62–$2.70 billion in revenue with gross margins of 63%–65%, holding SG&A roughly flat, guiding OpEx to grow about 9.5% at the midpoint, and expecting another strong cash‑flow year after generating over $107 million in cash flow in 2025 and carrying >$1 billion in cash and securities. That guide is supported by Q4 results of ~924,000 tests processed, ~225,000 MRD clinical units (MRD units +56% YoY), ~$666 million in Q4 revenue (~40% YoY growth), a Q4 gross margin of 66.9% (organic 63.7% ex-true-ups; 2025 ex‑true‑ups gross margin ~61.5%), ~47 day DSO (vs. 68 days in Q4 2024) and ~$60 million of true‑ups in the quarter; the midpoint implies roughly 25% growth over 2025 when backing out true‑ups. Management expects Signatera ASPs to step up from ~ $1,225 in Q4 with roughly $30 of additional ASP upside embedded in the guide (after a ~$20 Q4 step), anticipates sequential quarter‑over‑quarter growth for Signatera and Prospera (women’s health seasonality: Q1 high, Q2 down, Q3/Q4 recover), assumes limited modeled contribution from future true‑ups, and cited technology-driven margin and market upside including phased‑variant analytics with an LOD95 of ~3 parts per 10 million and detection below 1 per 10 million (10–100x lower LOD versus conventional methods).Natera Financial Statement Overview
Summary
Financials show a clear improvement trend: strong multi-year revenue growth, materially higher gross margin (~64.8% in 2025), narrowing losses, conservative and improving leverage (debt-to-equity ~0.12), and recently positive operating cash flow and free cash flow. The main constraint is that operating and net profitability remain negative, and the cash-flow inflection is relatively recent.Income Statement
Revenue growth has been strong over the cycle, with revenue expanding from ~$391M (2020) to ~$2.31B (2025) and accelerating again in 2025 (+8.95% vs. ~0.6% in 2024). Profitability has improved meaningfully: gross margin rose to ~64.8% (2025) from ~45.5% (2023), while net losses narrowed (net margin improved to ~-9.0% in 2025 from ~-40.2% in 2023). The key weakness remains that the company is still operating at a loss (negative EBIT/EBITDA and net income), indicating the business has not yet reached sustainable earnings power despite clear progress.58
Neutral
Balance Sheet
Leverage appears conservative and improving, with debt-to-equity down to ~0.12 in 2025 from ~0.58–0.63 in 2022–2023, which reduces financial risk. Equity has grown substantially (to ~$1.71B in 2025 from ~$0.77B in 2023), supporting a stronger capital base. The main weakness is ongoing negative returns on equity (about -12.2% in 2025), reflecting that losses still weigh on shareholder value despite the healthier balance sheet.74
Positive
Cash Flow
Cash generation has improved sharply: operating cash flow turned positive in 2024 (~$136M) and expanded in 2025 (~$215M), and free cash flow is positive and growing (to ~$109M in 2025; free cash flow growth ~16.6%). This indicates improving underlying cash economics and better funding flexibility. The key risk is that cash flow strength is relatively recent after several years of cash burn (2020–2023 negative operating and free cash flow), so durability through different demand environments remains to be proven.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.31B | 1.70B | 1.08B | 820.22M | 625.49M |
| Gross Profit | 1.50B | 1.02B | 492.74M | 363.97M | 307.07M |
| EBITDA | -264.02M | -148.08M | -383.28M | -507.03M | -451.54M |
| Net Income | -208.16M | -190.43M | -434.80M | -547.80M | -471.72M |
Balance Sheet | |||||
| Total Assets | 2.51B | 1.66B | 1.44B | 1.39B | 1.24B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 968.28M | 878.98M | 898.39M | 914.28M |
| Total Debt | 214.38M | 187.12M | 441.99M | 446.22M | 397.23M |
| Total Liabilities | 795.62M | 465.31M | 676.37M | 688.73M | 583.18M |
| Stockholders Equity | 1.71B | 1.20B | 765.33M | 705.74M | 653.30M |
Cash Flow | |||||
| Free Cash Flow | 109.11M | 69.24M | -286.15M | -479.20M | -376.27M |
| Operating Cash Flow | 215.30M | 135.66M | -246.96M | -431.50M | -335.24M |
| Investing Cash Flow | -132.21M | 137.62M | 168.50M | 330.34M | -205.19M |
| Financing Cash Flow | 47.46M | 30.20M | 254.46M | 482.64M | 576.19M |
Natera Technical Analysis
Negative
200.17
Price Trends
226.12
Negative
216.83
Negative
188.27
Positive
Market Momentum
-5.29
Positive
35.53
Neutral
45.72
Neutral
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 200.17 is below the 20-day moving average (MA) of 211.18, below the 50-day MA of 226.12, and above the 200-day MA of 188.27, indicating a neutral trend. The MACD of -5.29 indicates Positive momentum. The RSI at 35.53 is Neutral, neither overbought nor oversold. The STOCH value of 45.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTRA.
Natera Risk Analysis
Natera disclosed 53 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $19.73B | -93.56 | -8.66% | ― | 14.47% | -353.69% | |
62 Neutral | $28.37B | -130.26 | -14.32% | ― | 38.17% | -28.77% | |
59 Neutral | $20.32B | 24.32 | 33.36% | ― | -2.39% | ― | |
54 Neutral | $12.10B | -27.82 | ― | ― | 30.38% | 24.17% | |
52 Neutral | $1.23B | -11.26 | -12.42% | ― | 10.10% | -44.29% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $443.47M | -7.22 | -5.39% | ― | 13.60% | 74.64% |
* Healthcare Sector Average
NTRA
Natera
200.17
57.06
39.87%
EXAS
Exact Sciences
103.35
55.80
117.35%
ILMN
Illumina
132.89
48.69
57.83%
NEO
NeoGenomics
9.50
-0.08
-0.84%
FLGT
Fulgent Genetics
14.20
-1.08
-7.07%
GH
Guardant Health
92.23
51.49
126.39%
Natera Corporate Events
Business Operations and StrategyM&A Transactions
Natera Acquires Foresight Diagnostics for $275 Million
Positive
Dec 5, 2025
On December 4, 2025, Natera, Inc. completed its acquisition of Foresight Diagnostics, a cancer diagnostics company specializing in molecular residual disease detection in B-cell lymphomas. This strategic acquisition, valued at $275 million upfront with potential earnouts, enhances Natera’s capabilities in personalized MRD testing and expands its intellectual property portfolio. The integration of Foresight’s phased variant technology into Natera’s Signatera platform is expected to strengthen test performance across solid tumors and accelerate MRD adoption in lymphoma. This move positions Natera at the forefront of precision oncology, promising improved value for patients, clinicians, and biopharma partners.
The most recent analyst rating on (NTRA) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on Natera stock, see the NTRA Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.