The healthcare stocks on our list could see the strongest recoveries once the COVID-19 pandemic stabilizes due to their average expected revenue growth of 35% for 2020
SmallCapPower | March 16, 2020: Impacts from COVID-19 are being felt across all sectors of the economy, including healthcare stocks. Some of these stocks are trading down as much as 45%, despite having tremendous growth prospects for 2020. Today we highlight Canaccord’s Top 5 healthcare stocks expected to outperform in light of the recent COVID-19 pandemic.
*Share prices as at March 12, 2020, data obtained from S&P Capital IQ
Exact Sciences Corporation (NASDAQ:EXAS) – $51.51
Biotechnology
Exact Sciences provides cancer screening and diagnostic test products in the United States and internationally. The Company offers Cologuard, a non-invasive stool-based DNA screening test to detect colorectal cancer and pre-cancer. Its pipeline products focus on the research and development of enhancing Cologuard’s performance characteristics, and blood or other fluid-based tests. In 2020, the Cologuard business is expected to grow 40%, and the procedure remains non-invasive when compared with a colonoscopy. The Company is well capitalized and could be in strong position for a rebound.
- Market Cap: $7,621.8M
- 7-Day Return: -21.5%
- YTD-Return: -44.3%
- 90-Day Average Trading Volume: 2,504,080
- NTM Revenue Growth: 86%
Quanterix Corporation (NASDAQ:QTRX) – $16.38
Life Sciences Tools and Services
Quanterix develops and markets ultra-sensitive digital immunoassay medical equipment used in life sciences research and diagnostics globally. The Company operates primarily in the areas of neurology, oncology, cardiology, infectious diseases, and inflammation. It sells its products primarily to laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology, and contract research companies through a direct sales force, support organizations, and distributors or sales agents. There is a huge catalyst that QTRX is working on; providing a protein biomarker services that would enable pharm companies to run more efficient, cost-effective global pharma trails.
- Market Cap: $458.9M
- 7-Day Return: -23.0%
- YTD-Return: -30.7%
- 90-Day Average Trading Volume: 133,700
- NTM Revenue Growth: 28%
Guardant Health, Inc. (NASDAQ:GH) – $67.01
Health Care Providers and Services
Guardant Health is a precision oncology company, which provides blood tests, data sets, and analytics in the United States and internationally. The Company offers liquid biopsy tests for advanced stage cancer. The Company has a strategic collaboration with Amgen to develop and support commercialization of a blood-based companion diagnostic test for AMG 510 KRAS G12c inhibitor. Guardant Health is directly responsible for a major shift in how cancer patients are being managed, moving from a one-size-fits-all approach to a personalized approach could be a potential $51B market opportunity.
- Market Cap: $6,324.6M
- 7-Day Return: -13.9%
- YTD-Return: -13.9%
- 90-Day Average Trading Volume: 1,239,860
- NTM Revenue Growth: 32%
Castle Biosciences, Inc. (NASDAQ:CSTL) – $25.65
Biotechnology
Castle Biosciences develops and commercializes diagnostic and prognostic tests for cancers, particularly in the dermatological market. Its lead product is DecisionDx-Melanoma, a multi-gene expression profile (GEP) test to identify Stage I and II patients at high risk of metastasis based on biological information from 31 genes within their tumor tissue. Castle Biosciences faces essentially no competition in the ~2B skincare market and has seen benefits from recent sales force expansions. The Company is still under the radar following its July 2019 IPO and could be poised for some big moves in 2020.
- Market Cap: $441.0M
- 7-Day Return: -17.2%
- YTD-Return: -22.4%
- 90-Day Average Trading Volume: 135,990
- NTM Revenue Growth: 21%
Natera, Inc. (NASDAQ:NTRA) – $28.31
Biotechnology
Natera provides preconception and prenatal genetic testing services. It offers tests that can identify and screen genetic diseases in the fetus, screen fetal chromosomes to understand the cause of miscarriage, in addition to other genetic tests and tests on tumors and warts. Natera is expected to see its test volumes grow by 25% in 2020, despite trading down 25%.
- Market Cap: $2,215.3M
- 7-Day Return: -24.4%
- YTD-Return: -14.0%
- 90-Day Average Trading Volume: 782,370
- NTM Revenue Growth:13%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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