Biotech stocks are inherently riskier assets when the market is not on a one-way direction up like it was last year in 2017. So when a stock plunges, that is the time for Value Investors to ask why.
Exelixis (NASDAQ: EXEL) reported Q4 earnings of $0.12 and revenue of $120.1M, with both figures meeting estimates. The strong 54.8% year-over-year revenue growth may set the stage for a buyout but conditions are not as frothy. As such, EXEL stock fell 18.4% on the week and is down 21% YTD. Patience may pay off.
The prospects for Cabometyx is going up. On Feb. 7, the company showed treatment benefit for early-stage genitourinary tumor.
Exact Sciences (NASDAQ: EXAS) fell from $48 to $42 after reporting Q4 results. It was a sell on the news event. On Feb 26, the company reported that one million patients have now screened for the Cologuard test. On Feb. 22, the company reported Q4 earnings of -$0.18 (loss) on revenue of $87.4M.
The Y/Y 148% revenue growth should impress biotech investors. Exact sciences has a bright future ahead. It may reach profitability this year and profit growth the following year. As the downtrend in the stock price ends, investors may ride the rebound higher.
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