Exact Sciences (EXAS) is an Intriguing Medical Stock to Watch After Q3 Earnings

Reporting favorable Q3 results on Monday evening, Exact Sciences EXAS is an intriguing stock to watch among the Zacks Rank #1 (Strong Buy) list.

Recognized as a leader in medical diagnostics, the upside potential for Exact Sciences stock has been lifted by its improved operational and financial performance. Correlating with such, EXAS spiked nearly +4% on Tuesday and is now up more than +20% in 2025.

High Demand for Exact Sciences Cancer Screening Tests

Exact Sciences is seeing surging demand for its non-invasive at-home screening test, Cologuard, which detects both cancerous and precancerous cells for colorectal cancer. Adding further momentum to its diagnostic portfolio was the launch of CancerGuard, a multi-cancer early detection test, with Exact Sciences' Screening revenue jumping 22% year over year to $666 million. Overall, Exact Sciences Q4 sales rose 20% to $850.74 million and comfortably exceeded estimates of $810.45 million.

On the bottom line, Exact Sciences posted adjusted EPS of $0.24, beating expectations of $0.13 and climbing from an adjusted loss of $0.21 per share in Q3 2024. On a GAAP basis, Exact Sciences posted a much narrower net loss of $19.6 million versus a loss of $70 million a year ago. It’s also noteworthy that Exact Sciences' Adjusted EBITDA was up 37% YoY to $135 million with a margin expansion of 200 basis points to 16%.

Exact Sciences Strong Free Cash Flow

Bolstering improvements to its financial health, it’s important to note the cash flow improvements that were also highlighted in Exact Sciences' Q3 report.

In this regard, Exact Sciences' free cash flow spiked 69% during Q3 to $190 million, with the company seeing record operating cash flow of $220 million.

Exact Sciences Favorable Guidance

Raising its full-year fiscal 2025 guidance, Exact Sciences now expects annual sales to hit a new peak of between $3.22 billion-$3.23 billion, up from a previous range of $3.13 billion-$3.17 billion. This would reflect over 16% growth from FY24 sales of $2.76 billion.

Bottom Line

Record-breaking revenue growth, improved profitability, and the successful launch of its new multi-cancer detection test are leading to bullish sentiment for Exact Sciences stock, which was already benefiting from a positive trend of earnings estimate revisions (EPS) ahead of its Q3 report.  

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This article originally published on Zacks Investment Research (zacks.com).

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