Assessing Exact Sciences (EXAS) Valuation Following Launch of Cancerguard Multi-Cancer Blood Test

If you follow biotech movers in your portfolio, Exact Sciences (EXAS) just made waves by launching Cancerguard, its new multi-cancer early detection blood test in the United States. What sets this announcement apart is that Cancerguard can screen for over 50 cancer types, including those that previously had no recommended screening, and it boasts promising sensitivity and specificity results. The partnership with Quest Diagnostics and the company’s commitment to large-scale real-world evidence studies add to the significance of this rollout, giving investors plenty to consider about the impact on future growth.

This launch comes at a moment when Exact Sciences’ share price has experienced notable fluctuations. Over the past month, the stock rose 20%, suggesting renewed optimism following periods of sluggish performance earlier in the year. Although long-term returns have been mixed, with strength over three years but a weaker showing over the past year, momentum appears to be building recently, with product developments drawing attention back to growth potential.

With Cancerguard now available and investor attention increasing, some may be considering whether Exact Sciences is trading at an attractive entry point or if the market has already accounted for this significant launch and its future potential.

Most Popular Narrative: 15.7% Undervalued

According to the most widely followed narrative, Exact Sciences is considered undervalued by roughly 16%, based on future growth drivers and projected financial improvements.

Bullish analysts cite the Freenome deal and Shield V2 data as catalysts for renewed Street focus on execution. They note multiple near-term revenue growth drivers, continued EBITDA margin expansion, improving cash flow, and possible estimate upside.

What is really underpinning this undervaluation call? There are some aggressive assumptions and bold projections quietly powering this fair value. These numbers could change how you look at the growth story. If you want to uncover the surprising financial levers, future profit benchmarks, and ambitious targets shaping this analysis, don't miss the full breakdown of the narrative.

Result: Fair Value of $64.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing high R&D costs and increasing competition in cancer screening could challenge the growth assumptions behind this optimistic narrative.

Find out about the key risks to this Exact Sciences narrative.

Another View: DCF Model Perspective

Looking at Exact Sciences from the perspective of our DCF model offers a different angle. This approach suggests the shares may be undervalued, but every model comes with its own assumptions and uncertainties. Which method do you rely on most when making your investing decisions?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Exact Sciences for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Exact Sciences Narrative

If you have your own perspective or prefer a more hands-on approach, you can quickly build your own analysis in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Exact Sciences.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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