We recently compiled a list of the 10 Best Genomics Stocks To Buy Right Now. In this article, we are going to take a look at where Exact Sciences Corporation (NASDAQ:EXAS) stands against the other genomics stocks.

Genomics is the study of genes and how they function. Many rapidly growing companies are emerging in the genomics field as technological advances substantially reduce the cost, accuracy, and time required to map a human being’s genome.

Investors in innovation, like Cathie Wood, the CEO of ARK Investment Management, believe that these developments are bringing about a “Genomic Revolution.” She stressed the potential of genomics and urged investors to see beyond conventional market benchmarks to seize revolutionary growth. On the eToro’s Digest & Invest podcast on October 21, 2024, Wood emphasized that concentrating only on the most prominent indexes may restrict exposure to ground-breaking innovation. She stated that reduced AI training costs have boosted genomics productivity, opening the door to important breakthroughs like gene editing that targets diseases. She is nevertheless optimistic about these stocks’ long-term worth, despite the present market reluctance and cash flow-driven tendencies made worse by ongoing high interest rates. According to Wood, avoiding this industry may result in missed opportunities as it progresses from development that relies heavily on investments to future profitability. She believes the market is changing and that early adopters will benefit from the convergence of genomics and AI.

Nonetheless, there have been encouraging breakthroughs from a number of genomic companies in 2024, and investors have seen financial rewards as the biotechnology sector of the broader market has risen by 29.33% since the beginning of the year.

According to Grand View Research, the global genomics market was estimated to be worth $32.65 billion in 2023 and is projected to grow at a compound annual growth rate of 16.5% between 2024 and 2030. Factors including the rising need for customized treatment, gene therapy, drug development, rising cancer rates, and a notable surge in consumer genomics demand in recent years are all contributing to the genomics market’s expansion. The pharmaceutical and biotechnology companies segment dominated the global genomic market in 2023, as per the aforementioned research. In terms of market share, North America held the biggest share in 2023 (42.65%), while Asia Pacific is anticipated to develop at the fastest rate during the forecast period.

The fields of gene editing and cell and gene therapies (CGTs) are also developing quickly. The UK approved Casgevy for sickle cell disease and β-thalassemia, pointing out the potential of CRISPR gene editing. According to Deloitte’s research report, the growing market for CGTs, from US$5.3 billion in 2022 to $19.9 billion in 2027, signals a shift towards customized advanced medicine despite high costs leading innovative business models. Furthermore, as per the report, GenAI can analyze a variety of information, such as clinical history, genomes, and social determinants of health, to produce deeper insights that have the potential to completely transform the way healthcare is delivered.

Looking forward, Chris Garabedian, CEO of Xontogeny and Venture portfolio manager at Perceptive Advisors, stated:

“I think 2024 will be a transition year, a little more carnage left and a clearing. There are signs of hope this year, and after the election and that uncertainty is behind us, I think we’re going to start to see 2025 look healthy.”

Methodology:

We sifted through holdings of Genomics ETFs and online rankings to form an initial list of 20 genomics stocks. Then we selected the 10 stocks that had the highest upside potential. The stocks are ranked in ascending order of the upside potential, as of November 14.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)

Exact Sciences Corporation (NASDAQ:EXAS)

Upside potential as of November 14: 44.04%

Exact Sciences Corporation (NASDAQ:EXAS), located in Madison, Wisconsin, offers cancer screening and diagnostic test products in the United States and around the world. Exact Sciences approaches cancer testing in a number of ways. Presently available products include Oncotype DX, a tissue-based genetic profiling platform widely used in breast cancer, and Cologuard, the company’s flagship stool-based screening test for colorectal cancer, or CRC.

Exact Sciences Corporation (NASDAQ:EXAS) hopes to increase the precision and speed of cancer identification by utilizing AI in genetic testing and biomarker analysis, giving patients access to more individualized and efficient treatment options.

Exact Sciences Corporation (NASDAQ:EXAS) generated record revenue and cash flow, increased adjusted EBITDA, and an advanced pipeline in the third quarter of 2024. The company’s sales climbed 13% year over year to $709 million in Q3 2024, fueled by significant growth in Cologuard screening sales and consistent success in Precision Oncology services. The operating cash flow was $139 million, up 469.43% YoY, with free cash flow of $113 million.

In the latest quarter, Exact Sciences Corporation (NASDAQ:EXAS) showed encouraging results for its blood-based test with 88% cancer sensitivity and received FDA approval for Cologuard Plus, its next-generation colorectal cancer screening test. It also got Oncodetect, a test for tracking molecular residual disease and recurrence, accepted for peer-reviewed publication.

Tycho Peterson, an analyst at Jefferies, increased the price target for Exact Sciences Corporation (NASDAQ:EXAS) from $84 to $85 on November 6, 2024, and maintained a Buy rating on the shares. The analyst, who maintains shares as a “top pick,” notes that although the Q3 2024 results “brought plenty of drama” with a 1% revenue shortfall and a 3% projection decrease, the long-term plan is still in place and there were no significant changes to the 2025 setup, including Cologuard Plus, MRD, and critical blood data.

Columbia Acorn Fund stated the following regarding Exact Sciences Corporation (NASDAQ:EXAS) in its Q3 2024 investor letter:

“Exact Sciences Corporation (NASDAQ:EXAS) is a leading provider of non-invasive cancer screening and therapy selection tests with stool-based test Cologuard. The stock rebounded in the quarter after underperforming last quarter, when we added to the position on weakness. Quarterly results were better than expected, including a material upside surprise on profitability. Management also provided an update for its blood-based cancer screening test, and the initial results suggest potential for equivalent performance at a better cost profile versus peers. While we continue to believe blood-based testing is inferior to Cologuard, approval of this test could accelerate the company’s revenue growth and remove a sentiment overhang. Overall, Exact Sciences remains in the early innings of penetrating a $20 billion-plus total addressable market, with potential for double-digit revenue growth and expanding margins for the foreseeable future, supported by the launch of Cologuard Plus, an even more effective test.”

Overall EXAS ranks 7th on our list of the best genomics stocks to buy. While we acknowledge the potential of the EXAS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EXAS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.