Thursday, Barclays (LON:BARC) initiated coverage on Natera shares (NASDAQ:NTRA), currently trading at $171.93, with an Overweight rating and a $200 price target. The stock has demonstrated remarkable momentum, delivering a 158% return over the past year according to InvestingPro data. The firm's analyst, Luke Sergott, cited Natera's transformation and expansion into new markets as the basis for the positive outlook. Sergott highlighted Natera's evolution from its original non-NGS-based NIPT (non-invasive prenatal testing) focus to becoming a leading player in the NIPT market. Furthermore, Natera has extended its portfolio to include NGS-based Oncology and Organ Health testing.
According to Sergott, Natera's success is not just about entering new markets but being a first mover in the MRD (minimal residual disease) space, which is considered highly attractive. The company has also made significant strides in screening and is gaining market share in Organ Health, where it is currently ranked second and rapidly closing in on the top players. This market expansion has contributed to impressive revenue growth of nearly 55% over the last twelve months, with InvestingPro analysis showing strong financial health indicators including a comfortable current ratio of 4.39.
The analyst expressed confidence in both the near-term and long-term opportunities available to Natera, which are expected to sustain volume and revenue CAGRs (compound annual growth rates) moving forward. Sergott's outlook reflects a belief in the company's ability to maintain its growth trajectory without significant mergers and acquisitions, relying instead on its own capabilities and technologies.
Natera's management team has been recognized for achieving substantial growth within a relatively short time frame. This growth has been attributed to the company's strategic moves and first-mover advantage in certain markets, particularly within the MRD sector.
The Overweight rating suggests that Barclays expects Natera stock to outperform the average return of the stocks covered by the analyst in the sector over the next 12 to 18 months. The $200 price target represents a significant potential upside from the company's current trading levels. Based on comprehensive InvestingPro analysis, which includes 12 additional key insights and a detailed Pro Research Report available to subscribers, the stock appears to be trading above its Fair Value, suggesting investors should carefully consider their entry points.
In other recent news, Natera Inc . has expanded its patent infringement litigation against NeoGenomics (NASDAQ:NEO) involving the RaDaR assay. The company has also reported a record Q3 revenue of $439.8 million, marking a 64% increase from the previous year, and conducted 137,000 oncology tests. Amid these developments, TD Cowen, Baird, and Jefferies maintained favorable ratings on Natera's stock and raised their price targets.
Despite facing a setback in a false advertising lawsuit against Guardant Health (NASDAQ:GH), Natera plans to request the court to overturn the ruling. Furthermore, an agreement with Dr. Rabinowitz, the Executive Chairman, has been amended for him to continue his role under certain conditions. These recent developments provide investors with an insight into Natera's current status and future prospects.
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