Closer Look – NVTA

NVTA daily chart courtesy of MarketSmith

Quarterly Earnings – NVTA reported a loss of 40 cents in the most recent quarter up from a loss of 78 cents in the year ago quarter; a beat of 5 cents and 11% earnings surprise.

Quarterly Revenue – NVTA revenue growth increased 79% in the most recent quarter following revenue growth of 106%, 160% and 168% in the previous 3 quarters. Slowing?

Annual earnings growth – NVTA is estimated to lose $1.81 this year versus a loss of $1.94 last year. EPS estimates for 2020 currently point to a loss of $1.16. Operating losses improving, but dilution with recent secondary.

Changing the way we diagnose illness – NVTA is a genetic information company that processes and analyzes DNA samples and reporting their findings to clinicians and patients. These specific genetic tests include genes associated with cancer; neurological, metabolic and cardiovascular disorders and a host of hereditary disorders including pediatric, prenatal and embryonic testing. NVTA just launched a new direct to patient initiative offering testing directly to the consumer and opening up a massive new market. NVTA was founded in 2010 and is headquartered in San Francisco, California.

Accumulation – NVTA has an outstanding up/down volume ratio of 2.1 as shares reached a new 52 week high on Friday and sit just below the IPO high of $22.35. NVTA has an Accumulation/Distribution rating of A and mutual fund participation has increased to 224 funds from 143 nearly a year ago. 

Running mates – NVTA is in the Medical – Services group which is currently ranked number 26 out of 197 industry groups. Strong peers in the group include BEAT, GH, NEO and JYNT.

Technical notes: Cup and handle breakout on weekly/monthly chart with $22.35 overhead resistance at IPO high. Recent secondary offering at $19 very well received. RS line in new highs. Short float at 8.6% with over 4 days to cover. The driver here is revenue growth and potential profitability down the road.

NVTA weekly chart courtesy of MarketSmith

Disclaimer: None of the presented content represents individual investment advice to buy or sell securities and the information provided is solely for informational, educational and entertainment purposes. Author has a long position in NVTA at the time of this writing.