Natera (NTRA): Assessing Valuation After AI Platform Launch and Positive Phase III Signatera Results

If you’re holding or thinking about Natera (NTRA), this week’s news could be a meaningful signal for your watchlist. The company just launched a new proprietary AI foundation model platform, built on one of the largest multimodal oncology datasets available, and featuring advanced applications for clinical decision support and therapeutic discovery. In addition, Natera reported strong phase III trial results for its Signatera ctDNA test in muscle-invasive bladder cancer, a step that could move it closer to FDA approval as a companion diagnostic in immunotherapy. Combining these updates with the past year’s price action helps explain why the market is taking notice. Natera’s stock has climbed 35% over the past year, with momentum especially pronounced this past month as shares rose nearly 19%. These moves have coincided with progress in AI-driven product initiatives and several favorable clinical trial announcements, suggesting that investors are starting to factor in both growth potential and reduced risk as Natera advances further into oncology diagnostics. After a year marked by rising optimism, the question remains: Is this a timely buying opportunity, or is all the future growth already reflected in the price?

Most Popular Narrative: 16.6% Undervalued

According to community narrative, Natera’s stock is considered undervalued based on analyst expectations for future growth in earnings and revenue, despite risks and market uncertainties.

The company is leveraging a robust pipeline of clinical trials (over 100 underway), ongoing positive readouts, and investment in groundbreaking categories such as early cancer detection and AI-driven diagnostics. These initiatives are setting the stage for materially higher revenue streams and improved operating leverage as category-defining products come to market.

Want to know the real reason analysts are bullish? The secret ingredient isn't just growth. This narrative ties future profitability and valuation to a financial transformation few expect. What hidden assumptions are shaping Natera’s “undervalued” label? Dive deeper to see what could spark a major re-rating.

Result: Fair Value of $198.58 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, rapid innovation from rivals or regulatory changes could dampen Natera’s momentum. This may challenge both its growth outlook and analyst optimism. Find out about the key risks to this Natera narrative.

Another View

Looking from another perspective, our DCF model also indicates that Natera is trading below its fair value. However, can a discounted cash flow fully capture the risks involved in fast-changing biotech markets?

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 Natera 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 Natera Narrative

If you see things differently or want to dig deeper into the numbers, you can easily craft a personalized narrative using your own insights in just minutes, so why not do it your way?

A great starting point for your Natera research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Smart Investment Ideas?

Don’t limit your portfolio. There is a world of opportunities waiting just a click away. Expand your horizons and take charge of your next big move with these curated strategies designed for future-focused investors:

• Tap into high-growth potential with access to the most promising AI innovators by checking out AI penny stocks.
• Secure steady cash flow from leading companies offering attractive yields when you browse dividend stocks with yields > 3%.
• Seize value opportunities among tech-driven disruptors with our collection of quantum computing stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com