Canaccord Genuity initiated coverage of Natera (NASDAQ:NTRA) with a “buy” rating and $18 price target. The stock is changing hands at $11.66 in afternoon trading on Jan. 6.
Natera is the market leader in the $2.5-billion non-invasive prenatal testing market in the U.S. alone, with a penetration of 6%.
“We view Natera as one of the best growth companies in diagnostics, and trading at just 1.5 times our 2018 EV/revenue estimate, is undervalued relative to peers,” writes analyst Mark Massaro.
Mr. Massaro figures the stock can move higher because of the company’s expansion to average risk women; cross-selling micro-deletions testing; reduction in COGS; and entry into the massive oncology liquid biopsy market, which has a total addressable market of $15-billion-plus.