Exagen’s Growth Potential Amid ASP Challenges: A Positive Long-Term Investment Outlook
Exagen is viewed positively for long-term investment despite current average selling price (ASP) challenges. Revenue met expectations due to increased test volumes, which countered lower ASPs from a client shift to commercial insurance. Management aims for an ASP target of $600 and anticipates growth in test volumes. Analyst Daniel Brennan maintains an $18 price target, reflecting confidence in Exagen's value. He is a 5-star analyst with a 21.9% average return and a 57.81% success rate, covering the Healthcare sector.
Daniel Brennan’s rating is based on a combination of factors that highlight Exagen’s potential for growth despite current challenges. The company’s revenue was in line with expectations, driven by a significant increase in test volumes, which offset the impact of lower average selling prices (ASPs). The decline in ASPs was primarily due to a major client transitioning from direct billing to commercial insurance, as well as slower than anticipated progress with new biomarkers.
Despite these ASP headwinds, Exagen’s management remains optimistic about achieving a near-term ASP target of approximately $600 and anticipates further growth in test volumes. The company’s approach towards reaching adjusted EBITDA positivity, coupled with a large and expanding total addressable market, supports a favorable investment outlook. Brennan maintains a price target of $18, underscoring the belief in Exagen’s long-term value proposition.
According to TipRanks, Brennan is a 5-star analyst with an average return of 21.9% and a 57.81% success rate. Brennan covers the Healthcare sector, focusing on stocks such as Bruker, Exact Sciences, and Natera.
