Natera (NTRA)
NASDAQ:NTRA

Natera (NTRA) AI Stock Analysis

Compare
987 Followers

Top Page

NT

Natera

(NASDAQ:NTRA)

67Neutral
Natera's robust revenue growth and strong balance sheet are key strengths. However, ongoing net losses and negative profit margins are significant concerns. While the earnings call provided a positive outlook with growth opportunities, technical indicators suggest caution in the near term. The lack of profitability and negative P/E ratio impact valuation.
Positive Factors
Market Position
Natera Inc. is a leader in the $20B MRD market with a strong base in NIPT and carrier screening.
Oncology Segment
Oncology sees a strong start to the year led by positive NCCN guideline update, lung coverage, and solid data.
Revenue Growth
Revenue was driven by an increase in volume and ASPs, marking the fourth consecutive positive cash flow quarter.
Negative Factors
Financial Expenditures
NTRA plans to spend ~$20M on an FDA enabling trial this year ($40M over 2 years).
Operational Expenses
Opex guidance came in above expectations due to new products and sales channel investments.

Natera (NTRA) vs. S&P 500 (SPY)

Natera Business Overview & Revenue Model

Company DescriptionNatera, Inc. (NTRA) is a global leader in cell-free DNA testing, specializing in genetic testing services that focus on women's health, oncology, and organ health. The company utilizes proprietary technology to develop and commercialize non-invasive tests that help in early detection and management of genetic conditions. Natera's flagship products include Panorama, a non-invasive prenatal test (NIPT), Horizon, a carrier screening test, and Signatera, a test for cancer recurrence monitoring.
How the Company Makes MoneyNatera generates revenue primarily through the sale of its genetic testing services. The company's key revenue streams include payments for its non-invasive prenatal tests, carrier screening tests, and oncology test kits. Natera partners with healthcare providers, clinics, and hospitals to offer these tests directly to patients. The company also collaborates with pharmaceutical companies and research institutions for clinical trials and research studies, which contributes to its revenue. Additionally, Natera's tests are increasingly being covered by insurance plans, which boosts accessibility and customer adoption, thereby enhancing its earnings.

Natera Financial Statement Overview

Summary
Natera shows strong revenue growth and a healthy gross profit margin, but suffers from negative net profit and return on equity due to ongoing net losses. The balance sheet is strong with low leverage, and cash flow has improved, but consistent profitability is still needed.
Income Statement
75
Positive
Natera has demonstrated impressive revenue growth, with a revenue increase from $391.0 million in 2020 to $1.70 billion in 2024, reflecting strong market demand for its services. The gross profit margin for 2024 of 60.37% is healthy, indicating efficient cost management relative to revenue. However, the net profit margin remains negative due to consistent net losses, signaling that while revenue is growing, profitability has yet to be achieved. The EBIT and EBITDA margins are also negative, highlighting ongoing operational challenges.
Balance Sheet
72
Positive
The company's balance sheet shows a strong equity position with an equity ratio of 71.96% in 2024, reflecting a solid capital structure and reduced financial risk. The debt-to-equity ratio stands at 0.15, indicating low leverage and a conservative approach to debt. Despite these strengths, the ongoing net losses impact the return on equity, which remains negative, suggesting the need for improved profitability to enhance shareholder returns.
Cash Flow
68
Positive
Natera's cash flow has improved with a positive operating cash flow of $135.7 million in 2024, a significant turnaround from previous negative cash flows. The free cash flow is also positive at $69.2 million, indicating improved cash generation capabilities. However, the free cash flow to net income ratio is less favorable due to persistent net losses, suggesting room for further improvement in cash efficiency relative to earnings.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.70B1.08B820.22M625.49M391.00M
Gross Profit
1.02B492.74M363.97M307.07M187.38M
EBIT
-222.29M-446.25M-541.04M-468.17M-216.28M
EBITDA
-148.08M-383.28M-520.80M-451.54M-205.95M
Net Income Common Stockholders
-190.43M-434.80M-547.80M-471.72M-229.74M
Balance SheetCash, Cash Equivalents and Short-Term Investments
968.28M878.98M898.31M914.28M737.27M
Total Assets
1.66B1.44B1.39B1.24B932.15M
Total Debt
187.12M441.99M438.58M391.48M273.79M
Net Debt
-758.47M-200.10M-27.43M307.10M225.13M
Total Liabilities
465.31M676.37M688.73M583.18M445.92M
Stockholders Equity
1.20B765.33M705.74M653.30M486.24M
Cash FlowFree Cash Flow
69.24M-286.15M-479.20M-376.27M-202.12M
Operating Cash Flow
135.66M-246.96M-431.50M-335.24M-182.51M
Investing Cash Flow
137.62M168.50M330.34M-205.19M-331.46M
Financing Cash Flow
30.20M254.46M482.64M576.19M500.85M

Natera Technical Analysis

Technical Analysis Sentiment
Negative
Last Price133.87
Price Trends
50DMA
156.69
Negative
100DMA
160.14
Negative
200DMA
138.71
Negative
Market Momentum
MACD
-3.27
Negative
RSI
38.43
Neutral
STOCH
22.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRA, the sentiment is Negative. The current price of 133.87 is below the 20-day moving average (MA) of 145.17, below the 50-day MA of 156.69, and below the 200-day MA of 138.71, indicating a bearish trend. The MACD of -3.27 indicates Negative momentum. The RSI at 38.43 is Neutral, neither overbought nor oversold. The STOCH value of 22.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTRA.

Natera Risk Analysis

Natera disclosed 53 risk factors in its most recent earnings report. Natera reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Natera Peers Comparison

Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DGDGX
76
Outperform
$18.94B22.2613.24%1.83%6.70%2.56%
67
Neutral
$18.75B-19.42%56.75%59.77%
66
Neutral
$8.27B102.992.27%0.66%-75.89%
53
Neutral
$8.23B-37.09%10.37%-389.98%
49
Neutral
$12.10B-30.11%-2.93%-4.69%
GHGH
49
Neutral
$5.19B-4584.47%31.04%16.91%
48
Neutral
$6.36B1.09-49.92%2.63%17.17%0.95%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NTRA
Natera
133.87
38.44
40.28%
EXAS
Exact Sciences
42.55
-28.78
-40.35%
ILMN
Illumina
74.16
-52.30
-41.36%
QGEN
Qiagen
38.26
-3.23
-7.79%
DGX
Quest Diagnostics
164.18
36.10
28.19%
GH
Guardant Health
40.58
21.92
117.47%

Natera Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -14.52% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, significant advancements in product coverage, and successful data initiatives. While there are some challenges, particularly in the immediate financial impact of new legislative measures and product introductions, the overall outlook remains positive with substantial growth opportunities in oncology and women's health.
Highlights
Record Revenue Growth
Natera reported Q4 revenues of $476 million, up 53% year-on-year, exceeding the pre-announcement figure by $4 million.
Significant Volume Increase
Volumes rose by 26% compared to Q4 of the previous year, with notable growth in the Signatera unit.
Improved Gross Margins
Gross margins increased to 63% in Q4 from 51% a year ago, reflecting improvements in COGS and pricing.
Positive Cash Flow
Natera generated $46 million in cash flow in Q4, contributing to a total of $86 million for the full year.
Expansion in Oncology Coverage
Medicare coverage expanded for Signatera in non-small cell lung cancer, stages 1-3, enhancing access for patients.
Advancements in Organ Health
Progress in organ health with upcoming studies like PEDAL and DEFINE expected to impact kidney and heart transplant monitoring.
Data-Driven Achievements
Signed over $10 million in data-related contracts in early 2025, showcasing momentum in leveraging clinical and genomic data.
Lowlights
Slow Biomarker Bill Impact
The expected gradual improvement in ASPs from biomarker legislation indicates a slower-than-anticipated impact on revenue.
Potential Gross Margin Impact from New Products
The introduction of new MRD products could temporarily impact gross margins if uptake exceeds expectations.
Company Guidance
During the 2024 Fourth Quarter Financial Results Conference Call, Natera provided extensive guidance on its future outlook. The company reported Q4 revenues of $476 million, marking a 53% year-on-year increase, with volumes up 26%. Gross margins significantly improved to 63% compared to 51% the previous year. The company generated approximately $46 million in cash flow in Q4, contributing to a total of $86 million for the year. For 2025, Natera projects revenues between $1.87 billion and $1.95 billion, with a focus on maintaining stable ASPs and achieving gross margin improvements above the 59% posted in Q4, excluding true-ups. The company's robust R&D efforts, expected to continue growing, are primarily directed at its MRD product line and early cancer detection initiatives. Natera also highlighted the recent Medicare coverage expansion for its Signatera test in non-small cell lung cancer, and aspired to capitalize on increasing reimbursement for women's health and organ health services.

Natera Corporate Events

Executive/Board Changes
Natera Appoints Monica Bertagnolli to Board of Directors
Neutral
Mar 12, 2025

Natera, Inc. has announced the appointment of Monica Bertagnolli to its Board of Directors, effective March 6, 2025, increasing the board size from ten to eleven members. Dr. Bertagnolli, who previously served on the board from November 2020 to August 2022, will serve as a Class III director with a term expiring in 2027. Her appointment follows her tenure as Director of the National Cancer Institute, and she is recognized as an independent director under the Securities Act of 1933 and Nasdaq listing standards. Dr. Bertagnolli will also join the Nominating, Corporate Governance and Compliance Committee and will receive compensation similar to other non-employee directors. The company has also entered into an Indemnification Agreement with her, ensuring legal protection related to her service.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.