NTRA - Natera reaches four-month low despite Q3 beat

Natera, Inc. ( NASDAQ: NTRA ) shares dropped ~10% Wednesday to reach the lowest level since July despite reporting better-than-expected financials for Q3 as the molecular test maker lowered full-year guidance for gross margin.

However, the company raised its 2022 revenue outlook to $810M – $830M, in line with the consensus and up from $805M – $825M in the previous forecast.

For 2022, Natera ( NTRA ) expects its gross margin to stand at ~44% – 47% of revenue, down from ~46% – 48%, estimated three months ago.

Meanwhile, revenue for the past quarter rose ~33% YoY to $210.6M, backed by ~30% YoY growth in product revenue. The company processed ~517.5K tests during Q3 with ~27% YoY growth thanks to a 153% YoY rise in oncology tests performed.

However, the gross margin in Q3 2022 dropped to ~45% from ~49% in the prior year as volume growth, and customer support increased labor and overhead costs.

While Natera's ( NTRA ) Q3 net loss fell ~20% from the previous year to $121.5M, its cash and equivalents dropped ~32% from 2021 year-end to ~$57.0M.

After the results, BTIG, which has a Buy rating on the stock, lowered its price target on Natera ( NTRA ) to $75 from $95 per share.

Wall Street has maintained bullishness on Natera ( NTRA ) stock, with an average rating of Buy from analysts in line with Seeking Alpha Author ratings. However, Seeking Alpha's Quant System, which consistently beats the market, rated NTRA as a Hold.

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