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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)

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Neutral 70 (OpenAI - 4o)
Rating:70Neutral
Price Target:
$177.00
▲(3.89% Upside)
Natera's overall stock score reflects strong revenue growth and positive earnings call sentiment, driven by significant guidance raises and strategic innovations. Technical indicators show bullish momentum, though valuation challenges persist with a negative P/E ratio. The absence of corporate events and dividend yield limits the score.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for Natera's genetic testing services, enhancing its market position and supporting future expansion.
Gross Margin Improvement
Improved gross margins reflect enhanced operational efficiency, which can lead to better profitability and financial health over the long term.
New Product Launch
The launch of innovative products like Fetal Focus NIPT expands Natera's offerings, potentially increasing market share and revenue streams.
Negative Factors
Patent Invalidity Ruling
The invalidation of patent claims could weaken Natera's competitive edge and impact its ability to protect proprietary technologies, affecting long-term growth.
Negative Profit Margins
Persistent negative profit margins indicate ongoing challenges in achieving profitability, which could hinder financial sustainability and investor confidence.
Flat Operating Expenses
Flat operating expenses may limit Natera's ability to scale operations and invest in growth opportunities, potentially impacting long-term competitiveness.

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 generates revenue primarily through its genetic testing services. The key revenue streams include payments for tests performed in the reproductive health sector, such as NIPT and carrier screening, as well as oncology tests that detect genetic mutations related to cancer. The company also earns revenue from its organ transplantation services, which help assess compatibility between donors and recipients. Natera benefits from partnerships with healthcare providers, laboratories, and insurance companies that facilitate access to its testing services and contribute to patient referrals. Additionally, Natera invests in research and development to expand its test offerings, which can lead to increased revenue opportunities through new product launches and market expansion.

Natera Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue and volume growth, particularly in the oncology segment with Signatera. The company raised its financial guidance significantly and introduced promising new products and AI initiatives. However, flat operating expenses and the exit from the paternity business were noted as areas of concern. Nevertheless, the positive aspects, including strong market performance and strategic innovations, dominate the outlook.
Q2-2025 Updates
Positive Updates
Revenue Growth
Natera achieved $547 million in revenue for Q2 2025, representing a 32% growth over Q2 2024, and 34% growth year-on-year excluding revenue true-ups.
Signatera Performance
Processed 189,000 oncology tests, with nearly 20,000 units of growth compared to Q1 2025, marking a new milestone with strong growth in new patient starts, doubling the previous quarterly record.
Gross Margin Improvement
Gross margin increased to 63.4% compared to approximately 59% in the previous year, with consistent sequential margins due to strong ASPs.
Raised Financial Guidance
Revenue guidance for 2025 increased by $80 million to a range of $2.02 billion to $2.1 billion, with gross margin guidance raised to 61% to 64%.
Launch of Fetal Focus NIPT
Natera launched a new NIPT for inherited conditions that demonstrated 91% sensitivity in detecting affected pregnancies in early clinical trials.
Organ Health and Oncology Data
Positive data from the PEDAL study in organ health and several studies in oncology, including breast and GI cancers, showcasing potential for improved patient management.
AI Initiatives and New Algorithms
Introduction of AI-based discovery and care platforms, including NeoPredict and NeoSelect algorithms, enhancing capabilities for predicting immune therapy responses and identifying neoantigens.
Negative Updates
Operating Expenses Remain Flat
Despite the increased revenue guidance, operating expenses are not expected to increase, indicating a possible cap on short-term investment in scaling operations.
Legacy Business Exit
Exited the legacy paternity business, which historically contributed to volume numbers, indicating a shift away from this segment.
Cost of Goods Sold Increase
Signatera's cost of goods sold increased due to running many exomes for first-time patients, despite overall positive news from volume growth.
Company Guidance
During Natera's 2025 Second Quarter Financial Results Conference Call, the company announced impressive metrics and updates across its operations. Natera reported $547 million in revenue, marking a 32% year-over-year increase, with an even higher growth of 34% excluding revenue true-ups. A notable achievement was the processing of 189,000 oncology tests, translating to a sequential growth of nearly 20,000 units, setting a new company milestone. Gross margin improved to 63.4%, up from approximately 59% the previous year. The company raised its annual revenue guidance to a range of $2.02 billion to $2.1 billion and adjusted its gross margin outlook to between 61% and 64%. Natera also highlighted its launch of Fetal Focus and ongoing advancements in organ health and oncology, such as the PROCEED trial for early cancer detection expected to read out later this fall. Operationally, they maintained their focus on cost management and efficiency, driven by AI initiatives, while keeping operating expenses flat despite revenue growth.

Natera Financial Statement Overview

Summary
Natera shows strong revenue growth and improving operational efficiency, with a rising gross profit margin. However, profitability challenges persist, with negative net income and EBIT margins. The balance sheet is healthy with low leverage, but negative ROE remains a concern. Cash flow metrics are positive, with significant growth in free cash flow, suggesting potential for future profitability improvements.
Income Statement
65
Positive
Natera has shown consistent revenue growth, with a TTM revenue growth rate of 7.28%. The gross profit margin has improved to 62.91% in the TTM, indicating strong operational efficiency. However, the company is still facing challenges in profitability, as evidenced by negative net profit and EBIT margins, which are -12.89% and -12.57% respectively. The improvement in EBITDA margin to -11.83% suggests some progress in reducing operational losses.
Balance Sheet
60
Neutral
The company's debt-to-equity ratio has improved to 0.15, reflecting a relatively low level of leverage. However, the return on equity remains negative at -22.21%, indicating ongoing challenges in generating profits from shareholders' equity. The equity ratio stands at 70.93%, showing a strong equity base relative to total assets.
Cash Flow
70
Positive
Natera's free cash flow has grown by 22.73% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 0.49 suggests that the company is generating cash from operations, though not yet sufficient to cover net losses. The free cash flow to net income ratio of 0.56 highlights progress in aligning cash flow with profitability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.96B1.70B1.08B820.22M625.49M391.00M
Gross Profit1.24B1.02B492.74M363.97M307.07M187.38M
EBITDA-211.86M-148.08M-383.28M-507.03M-451.54M-205.95M
Net Income-253.24M-190.43M-434.80M-547.80M-471.72M-229.74M
Balance Sheet
Total Assets1.76B1.66B1.44B1.39B1.24B932.15M
Cash, Cash Equivalents and Short-Term Investments1.02B968.28M878.98M898.39M914.28M737.27M
Total Debt196.13M187.12M441.99M446.22M397.23M281.09M
Total Liabilities510.88M465.31M676.37M688.73M583.18M445.92M
Stockholders Equity1.25B1.20B765.33M705.74M653.30M486.24M
Cash Flow
Free Cash Flow104.56M69.24M-286.15M-479.20M-376.27M-202.12M
Operating Cash Flow186.70M135.66M-246.96M-431.50M-335.24M-182.51M
Investing Cash Flow-9.29M137.62M168.50M330.34M-205.19M-331.46M
Financing Cash Flow25.81M30.20M254.46M482.64M576.19M500.85M

Natera Technical Analysis

Technical Analysis Sentiment
Positive
Last Price170.38
Price Trends
50DMA
161.22
Positive
100DMA
159.70
Positive
200DMA
158.47
Positive
Market Momentum
MACD
0.05
Positive
RSI
55.02
Neutral
STOCH
46.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRA, the sentiment is Positive. The current price of 170.38 is above the 20-day moving average (MA) of 169.91, above the 50-day MA of 161.22, and above the 200-day MA of 158.47, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 55.02 is Neutral, neither overbought nor oversold. The STOCH value of 46.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Neutral
$22.97B-24.32%44.38%22.87%
66
Neutral
$15.70B12.9368.11%-3.32%
63
Neutral
$704.31M-4.54%4.31%69.57%
57
Neutral
$7.84B-4584.47%28.74%18.25%
53
Neutral
$10.74B-35.51%12.56%-464.28%
51
Neutral
$7.86B-0.30-43.30%2.27%22.53%-2.21%
51
Neutral
$1.18B-11.76%9.70%-30.94%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NTRA
Natera
170.38
42.18
32.90%
EXAS
Exact Sciences
57.63
-11.62
-16.78%
ILMN
Illumina
101.02
-39.64
-28.18%
NEO
NeoGenomics
9.10
-4.68
-33.96%
FLGT
Fulgent Genetics
23.01
2.54
12.41%
GH
Guardant Health
63.38
42.03
196.86%

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.

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: Aug 19, 2025