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Natera (NTRA)
NASDAQ:NTRA
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Natera (NTRA) AI Stock Analysis

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NTRA

Natera

(NASDAQ:NTRA)

Rating:64Neutral
Price Target:
$153.00
▲(10.87%Upside)
Natera's strong financial performance and positive earnings call highlight robust revenue growth and strategic advancements in diagnostics, contributing positively to the stock score. However, technical indicators and valuation concerns, driven by a negative P/E ratio and bearish technical signals, weigh down the overall score.
Positive Factors
Earnings
Natera Inc. delivered a strong performance with record growth in its Signatera MRD business, leading analysts to reiterate a Buy rating and raise the price target to $195.
Market Position
NTRA remains the front-runner in the $20B MRD market, with strong unit volume growth and continued momentum of Signatera.
Revenue Guidance
The company increased its 2025 revenue guidance to between $1.94 billion and $2.02 billion, reflecting about 26% year-over-year growth at the midpoint.
Negative Factors
Competition
New entrants are rapidly entering the MRD market, aiming to capture a share of this large opportunity, increasing competition for NTRA.
Operating Expenses
Recent sell-off in NTRA shares has led to increased investor inquiries about potential increases in operating expenses and emerging competition.

Natera (NTRA) vs. SPDR S&P 500 ETF (SPY)

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 makes money primarily through the sale of its diagnostic tests and services. The company generates revenue by providing genetic testing solutions to healthcare professionals, hospitals, and clinics. Its key revenue streams include its flagship Panorama non-invasive prenatal test, which screens for fetal chromosomal abnormalities, the Prospera transplant assessment test for monitoring organ transplant rejection, and the Signatera test for residual disease detection in oncology. Natera also partners with pharmaceutical companies to use its technology in clinical trials and drug development, further enhancing its revenue potential. The company benefits from the growing demand for personalized medicine and the increasing adoption of genetic testing in healthcare.

Natera Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -15.11%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance for Natera, with significant revenue growth, volume increases across key segments, and positive cash flow. Despite minor challenges such as weather disruptions and some uncertainty in ASP improvements, the company's strategic initiatives in diagnostics and oncology are bearing fruit, leading to an optimistic outlook.
Q1-2025 Updates
Positive Updates
Record Revenue Growth
Natera generated $502 million in revenue this quarter compared to $368 million in the previous year, representing approximately 37% growth.
Signatera Volume Surge
Signatera clinical volumes grew 52% year-on-year with a sequential increase of 16,500 units, marking the best sequential unit quarter yet.
Women's Health and Organ Health Expansion
Women's Health volumes grew by more than 40,000 units sequentially, while Organ Health saw over 50% year-on-year growth.
Gross Margin Improvement
Gross margins were 63% for the quarter, with an improvement of more than 110 basis points compared to the previous quarter.
Prospera and DQS Study Success
The DEFINE study showed Prospera's ability to predict clinical outcomes in heart transplantation, outperforming biopsy in predicting graft dysfunction.
Positive Cash Flow
Natera generated $23 million in cash, even with increased investments in growth opportunities.
Negative Updates
Weather Challenges
The company faced disruptions from wildfires in Southern California, although it managed to maintain strong volumes.
Complexity in ASP Prediction
Despite a positive outlook, the precise impact of future ASP improvements remains uncertain, especially with ongoing reimbursement negotiations.
Company Guidance
During Natera's 2025 first-quarter financial results conference call, the company provided robust guidance driven by significant growth across various metrics. Revenue reached $502 million, marking a 37% increase year-over-year, with 855,000 units processed. Signatera's clinical volumes rose by 52% year-on-year. Gross margins were at 63%, with an improvement of over 110 basis points compared to Q4 2024. The company generated $23 million in cash and raised its annual revenue guidance to a range of $1.94 billion to $2.02 billion, indicating a 26% year-over-year growth excluding true-ups. Strategic highlights included advancements in clinical studies, specifically in heart transplantation and breast cancer, and continued expansion in oncology, with a focus on data-driven growth and reimbursement strategies.

Natera Financial Statement Overview

Summary
Natera demonstrates strong revenue growth and an improving cash flow position, reflecting a robust market presence and effective cash management. However, consistent net losses and negative profit margins highlight challenges in achieving profitability. The balance sheet is solid with a strong equity position and manageable debt levels.
Income Statement
68
Positive
Natera's revenue trajectory shows robust growth with a significant increase from $391 million in 2020 to $1.83 billion in TTM (Trailing-Twelve-Months) 2025. This growth trend is impressive, indicating strong market demand. However, the company has consistently posted negative EBIT and net income, highlighting ongoing challenges in achieving profitability. The gross profit margin has improved, suggesting operational efficiencies, but the net profit margin remains negative, impacting overall profitability.
Balance Sheet
72
Positive
Natera maintains a solid equity base, with stockholders' equity increasing from $486 million in 2020 to $1.24 billion in TTM 2025. The debt-to-equity ratio has improved, reflecting prudent debt management. Additionally, the company has a strong equity ratio, indicative of financial stability. However, the consistent net losses present a risk to long-term equity growth, despite the currently favorable debt levels.
Cash Flow
75
Positive
The company has shown a positive trend in free cash flow, growing from a deficit to a surplus of $85 million in TTM 2025. Operating cash flow has also turned positive, demonstrating improved cash management. The operating cash flow to net income ratio indicates that cash generation is better than accounting earnings, which is a positive sign. However, the history of negative free cash flow ratios could pose potential challenges if not managed carefully.
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Natera Technical Analysis

Technical Analysis Sentiment
Negative
Last Price138.00
Price Trends
50DMA
157.65
Negative
100DMA
152.88
Negative
200DMA
154.26
Negative
Market Momentum
MACD
-6.77
Positive
RSI
28.35
Positive
STOCH
8.10
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 138 is below the 20-day moving average (MA) of 149.88, below the 50-day MA of 157.65, and below the 200-day MA of 154.26, indicating a bearish trend. The MACD of -6.77 indicates Positive momentum. The RSI at 28.35 is Positive, neither overbought nor oversold. The STOCH value of 8.10 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 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

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$11.04B122.142.67%2.46%3.31%-72.63%
71
Outperform
$18.77B20.0713.65%1.85%12.58%13.00%
64
Neutral
$18.84B-18.66%51.50%53.23%
55
Neutral
$17.39B-23.82%-3.47%25.55%
54
Neutral
$9.06B-36.89%11.57%-315.25%
52
Neutral
$7.59B0.18-63.14%2.16%16.34%0.64%
45
Neutral
$5.48B-4584.47%28.20%13.87%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NTRA
Natera
135.84
38.09
38.97%
EXAS
Exact Sciences
47.54
0.96
2.06%
ILMN
Illumina
108.71
-13.79
-11.26%
QGEN
Qiagen
51.07
6.60
14.84%
DGX
Quest Diagnostics
167.93
27.76
19.80%
GH
Guardant Health
43.32
7.03
19.37%

Natera Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Natera Approves Equity Plan Amendment at Annual Meeting
Neutral
Jun 18, 2025

On June 12, 2025, Natera, Inc. held its Annual Meeting of Stockholders, where an amendment to the 2015 Equity Incentive Plan was approved, increasing the shares reserved for issuance by 3.6 million. This decision, along with the election of directors and ratification of Ernst & Young LLP as the accounting firm, reflects Natera’s strategic focus on enhancing its equity structure and governance.

The most recent analyst rating on (NTRA) stock is a Buy with a $157.00 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.Date of analysis: Jul 18, 2025