Natera Shares Down 12%; Cowen Reiterated Outperform Following Meetings With Mgmt

Natera Inc NTRA reported its first quarter financial results on Tuesday afternoon. The net loss reached ($0.17) per share, and revenue, $61.9 million. While better than expected, the results prompted a tumble in the stock price, which fell 12.11 percent on Wednesday trading.

Cowen recently hosted a few investor meetings with Natera’s Senior Management team. Following the encounters the firm reiterated an Outperform rating and $17 price target on the stock.

The report, issued Wednesday, pointed out the company’s solid job during the meets, outlining:

• Near term ASP dynamics
• The average risk NIPT revenue growth outlook
• The path to a material amelioration in COGS
• Its liquid biopsy product pipeline

As per the report, the Outperform rating was supported by estimates that the NIPT market currently offers an opportunity of roughly $2 billion – with the potential to expand by more than five-fold “as measured by volumes if NIPT becomes well adopted in the average risk segment.” Importantly, the experts noted, “Natera is well-positioned to capitalize on this opportunity.”

The company’s long term strategy is also quite alluring, the research note continued, given that its core technology could position it well in a potentially massive market for liquid biopsy.

Taking into account the large -and expanding- NIPT market and Natera’s position as a key player in the segment, analysts at Cowen believe the company is poised to grow revenue at a 5-year CAGR of 18 percent.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.