Natera, Inc. (NASDAQ:NTRA) is expanding across oncology, women’s health and organ transplantation, but Jim Cramer says the stock’s valuation has become difficult to justify after a sharp rally. During the September 3 episode of Mad Money, he said, “It is an intriguing story.” He called it “a precision medicine platform,” as he advised investors to wait for a pullback rather than chase the shares.
Natera Stock and Q2 Earnings
Natera, Inc. reported second-quarter revenue of $752.8 million, up 37.7% year over year. Oncology test volumes increased 57.2%, total test volume reached approximately 1.04 million, and gross margin rose to 64.5%. Management raised its 2026 revenue forecast by $100 million at the midpoint to $2.85 billion-$2.91 billion.
Signatera, the company’s personalized blood-based cancer test, remains a major part of the growth story. Clinical molecular residual disease volume reached approximately 283,000 units, up 56% year over year. Cramer referenced analyst research estimating the solid-tumor MRD market could eventually be worth $20 billion-$30 billion, as he noted that Natera currently holds only a small portion of that market.
Management has cautioned about the pace of quarterly volume growth. Chief Executive Steve Chapman said the company does not expect to set another volume record in the third quarter after clinical MRD volume increased by 34,000 units sequentially in the second quarter, the largest sequential increase to date. Additionally, it is also expanding its transplant business. Expanded Medicare surveillance coverage for Prospera took effect on August 30 across kidney, heart, and lung transplant recipients. Signatera has also received regulatory approval in Japan for colorectal cancer.
Natera Stock Faces Valuation Risks
Natera, Inc. remains unprofitable. It reported a second-quarter net loss of $67 million, or $0.47 a share, compared with a $0.74 per share loss a year earlier. The company expects positive cash flow in 2026, but research and development expenses are projected at $800 million-$900 million. At around $328 on September 4, shares were up approximately 93% over the past year. Cramer mentioned:
Stock trades at roughly 16 times this year’s expected sales, not earnings, but sales, even as the company’s losing money and its shares are already up 43% year to date.
The company identifies competition, reimbursement, regulatory requirements, clinical validation, and adoption of its tests among its risks. Cramer also warned that competitors are spending aggressively on liquid biopsy and cancer monitoring and that reimbursement and regulatory standards remain uncertain. Additionally, Cramer said Wall Street expects the company to become profitable in 2028, followed by substantial earnings growth through 2031. Nevertheless, he emphasized that “Natera is not cheap and it’s certainly not undiscovered.”
Natera Hedge Fund Ownership and Short Interest
In Q2, as per Insider Monkey’s tracking of more than 1,000 hedge funds, 77 hedge funds held NTRA, up from 68 in the first quarter. During the episode, Cramer specifically mentioned that Stanley Druckenmiller’s Duquesne Family Office reported nearly 3.19 million NTRA shares worth approximately $865 million as of June 30. Short interest remains relatively low, with about 3.1% to 3.2% of the float sold short. Cramer concluded by saying:
Bottom line: I would put Natera on my watch list because it’s moved so much. I think it’s just run to the point where I can’t justify chasing it, but it is definitely worth waiting for a pullback and then doing some buying.
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