On Tuesday, Cantor Fitzgerald adjusted its outlook on Exagen Inc . (NASDAQ:XGN), a diagnostics company, by raising the price target from $5.00 to $7.00, while maintaining an Overweight rating. The revision follows Exagen's announcement of its first-quarter 2024 financial results and an upward revision of its full-year guidance.
Exagen reported first-quarter revenue of $14.4 million, surpassing the $13.1 million estimates by Cantor Fitzgerald and FactSet, marking a 28% year-over-year increase. The revenue growth was primarily fueled by the company's AVISE CTD test, which saw its average selling price (ASP) jump by approximately 35% year-over-year to $377.
The number of AVISE CTD tests conducted in the quarter remained stable at just over 30,000, a similar level to the fourth quarter of 2023.
Looking ahead to the rest of 2024, Exagen has raised its revenue guidance to at least $55 million, up from the previous estimate of approximately $54 million. This update suggests a year-over-year growth of around 5%.
The company attributes this expected revenue growth mainly to improvements in ASP, a result of revenue cycle management initiatives initiated early in 2023. These efforts have already shown success, with Exagen collecting approximately $700 thousand from tests conducted over a year ago.
Exagen also confirmed its commitment to expanding its product offerings by launching new proprietary T cell and Rheumatoid Arthritis (RA) biomarkers within its Connective Tissue Disease (CTD) testing platform in the fourth quarter. These new biomarkers are anticipated to enhance the sensitivity of the tests.
The firm's analyst highlighted Exagen's potential, noting the company's more profitable business model, improving ASPs, and the upcoming introduction of a superior test to its portfolio.
With Exagen's stock currently trading at 0.2 times its estimated 2024 revenue, in contrast to its peers trading at 3.6 times, the firm reiterated its positive stance on the stock, citing a favorable risk/reward setup.
InvestingPro Insights
Following Cantor Fitzgerald's upbeat outlook on Exagen Inc. (NASDAQ:XGN), InvestingPro data and tips provide additional context for investors considering the company's prospects. Exagen's market capitalization stands at a modest $28.46 million, and the company has experienced a notable 20.59% return over the last week. Importantly, Exagen's revenue for the last twelve months as of Q1 2024 reached $55.73 million, reflecting a robust year-over-year growth of 20.12%. This aligns with the company's raised revenue guidance and highlights its growth trajectory.
InvestingPro Tips indicate that Exagen holds more cash than debt on its balance sheet, which is a positive sign for financial stability. However, it's also important to note that analysts do not anticipate the company will be profitable this year, and two analysts have revised their earnings downwards for the upcoming period. With the company trading at a low revenue valuation multiple and not paying dividends, investors might see potential for capital appreciation, especially with the introduction of new biomarkers to enhance its testing platform.
For those interested in a deeper dive into Exagen's financial health and future prospects, there are additional InvestingPro Tips available. To explore these insights, visit https://www.investing.com/pro/XGN and remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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