Natera (NTRA) AI Stock Analysis

• Market Cap: $20.79B
• Dividend Yield: N/A
• Average Volume (3M): 1.43M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: 56.75%
• EPS Growth: 59.77%
• Country: US
• Employees: 4,424
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -1.53
• Shares Outstanding: 135,186,190
• 10 Day Avg. Volume: 819,752
• 30 Day Avg. Volume: 1,432,302
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.04
• Price to Cash Flow (P/CF): 96.60
• P/FCF Ratio: 94.30
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 19.57
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $195.36
• Price Target Upside: 27.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

Natera is positioned well with strong revenue growth and a solid balance sheet, yet it faces significant challenges with profitability. The company's ongoing investments in R&D and product expansions, particularly in oncology, offer promising growth potential. Technical indicators suggest a neutral market position. Valuation concerns remain due to negative earnings, but positive sentiment from recent earnings calls supports future growth expectations.

Positive Factors

Guidance and Future Growth

The 2025 guidance exceeds expectations with substantial potential for growth from volume and ASP opportunities.

Oncology Segment Growth

Signatera's dominance in the MRD market is highlighted by the delivery of 145k tests and significant revenue growth in the oncology segment.

Revenue Growth

Revenue was driven by an increase in volume and ASPs, marking the fourth consecutive positive cash flow quarter.

Negative Factors

FDA Trial Costs

NTRA plans to spend ~$20M on an FDA enabling trial this year ($40M over 2 years).

Operational Expenditure

Opex guidance came in above expectations due to new products and sales channel investments.

Natera Business Overview & Revenue Model

Company Description

Natera, 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 Money

Natera 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

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

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

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 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.70B	1.08B	820.22M	625.49M	391.00M
	Gross Profit
1.02B	492.74M	363.97M	307.07M	187.38M
	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 Sheet		Cash, Cash Equivalents and Short-Term Investments
968.28M	878.98M	898.31M	914.28M	737.27M
	Total Assets
1.66B	1.44B	1.39B	1.24B	932.15M
	Total Debt
187.12M	441.99M	438.58M	391.48M	273.79M
	Net Debt
-758.47M	-200.10M	-27.43M	307.10M	225.13M
	Total Liabilities
465.31M	676.37M	688.73M	583.18M	445.92M
	Stockholders Equity
1.20B	765.33M	705.74M	653.30M	486.24M
Cash Flow		Free 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
137.62M	168.50M	330.34M	-205.19M	-331.46M
	Financing Cash Flow
30.20M	254.46M	482.64M	576.19M	500.85M

Natera Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 153.79
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRA, the sentiment is Positive. The current price of 153.79 is above the 20-day moving average (MA) of 144.88, above the 50-day MA of 149.57, and above the 200-day MA of 141.32, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 55.71 is Neutral, neither overbought nor oversold. The STOCH value of 85.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTRA.

Natera Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGX	79 Outperform	$19.40B	21.96	13.35%	1.73%	9.38%	6.43%
QGEN	74 Outperform	$9.09B	113.24	2.27%	―	0.66%	-75.89%
NTRA	68 Neutral	$20.79B	―	-19.42%	―	56.75%	59.77%
GH	52 Neutral	$5.96B	―	-4584.47%	―	31.04%	16.91%
Sector *	51 Neutral	$5.31B	3.39	-40.42%	2.90%	18.11%	2.25%
ILMN	51 Neutral	$12.24B	―	-30.11%	―	-2.93%	-4.69%
EXAS	50 Neutral	$8.44B	―	-37.09%	―	10.37%	-389.98%

Natera Corporate Events

Natera Appoints Monica Bertagnolli to Board of Directors

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.