What Happened?

Shares of diagnostic company Exact Sciences Corporation (NASDAQ: EXAS) fell 5.9% in the morning session after the company reported underwhelming fourth-quarter 2024 results as profit margins worsened significantly while revenue trudged along. While EXAS deserves some credit for the modest top-line beat, the company remained unprofitable on a GAAP basis, and this is also wiping out its cash flow headroom as free cash flow margin also fell significantly during the quarter. On the other hand, Exact Sciences blew past analysts' constant currency revenue expectations this quarter, and its adjusted EPS and EBITDA outperformed. Still, we think this was still a mixed yet challenging quarter.

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What The Market Is Telling Us

Exact Sciences’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Exact Sciences is down 14.2% since the beginning of the year, and at $48.85 per share, it is trading 34.2% below its 52-week high of $74.26 from April 2024. Investors who bought $1,000 worth of Exact Sciences’s shares 5 years ago would now be looking at an investment worth $475.94.

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