What Happened?

Shares of diagnostic company Exact Sciences Corporation (NASDAQ:EXAS) jumped 15.2% in the morning session after the company reported strong first quarter 2025 results which beat analysts' revenue and EBITDA expectations and included full-year revenue guidance that slightly exceeded Wall Street's estimates. Sales grew 11% from the previous year, driven by a 14% rise in screening revenue, while precision oncology grew more modestly at 4% on a core basis. The sales bump largely came from the expansion of the company's test menu and stronger execution in its commercial teams. Overall, this print had some key positives.

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What The Market Is Telling Us

Exact Sciences’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Exact Sciences and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 2 months ago when the stock dropped 5.9% on the news that the company reported underwhelming fourth-quarter results as profit margins worsened significantly while revenue trudged along. While EXAS deserves some credit for the modest top-line beat, the company remained unprofitable on a GAAP basis, and this also wiped out its cash flow headroom, as free cash flow margin also fell significantly during the quarter. On the other hand, Exact Sciences blew past analysts' constant currency revenue expectations this quarter, and its adjusted EPS and EBITDA outperformed. Still, we think this was still a mixed yet challenging quarter.

Exact Sciences is down 7.8% since the beginning of the year, and at $52.52 per share, it is trading 27% below its 52-week high of $71.93 from October 2024. Investors who bought $1,000 worth of Exact Sciences’s shares 5 years ago would now be looking at an investment worth $677.91.

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