QS Research · Michael Burry's Scion Capital analyst template · 2006
Natera, Inc. (NTRA)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +4% · downside -16% · upside +24%
Natera is a genuine growth asset — Q3 2026 revenue rose 34.1% to $794.0M, oncology tests rose 60.9%, and FY2026 revenue guidance was raised to $3.005–$3.035B on 2026-11-05 — but at $310.67 it still trades at 15.14x EV/Sales on TTM revenue of $2.91B, with TTM EBIT of -$260.4M, TTM net income of -$164.7M and a 0.1% FCF yield, so there is no earnings or cash-flow floor. Section 13's TTM base is stale relative to the just-raised FY2026 guidance, so I use the $3.02B midpoint as one base for all three cases. At the same 15.14x EV/Sales, my base is about $322 (+3.8%), with 20% revenue downside/upside giving about $259 (-16.5%) and $385 (+24.1%). The multiple already discounts much of the visible growth, and the rule is not met for a long or a short; watch.
Key numbers
- Share price: $310.67
- Market cap: $45.05B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $2.91B
- Price / book: 24.10x
The 15 boxes
- ✓ 1. Long-form business notes
Natera is a cfDNA diagnostics company that in FY2025 booked $2,306.1M of revenue (vs $391.0M in FY2020) and ran roughly 3.5 million tests, with product/testing revenue of $2,295.8M making up nearly all of it. It is still loss-making on an operating basis: FY2025 operating income was -$309.9M, wider than FY2024's -$222.3M, and FY2025 net loss was $208.2M, yet operating cash flow turned positive ($135.7M FY2024, $215.3M FY2025) against -$247.0M in FY2023, and cash stood at $1.08B at 12/31/2025. The business has reshaped from a women's-health-led franchise (FY2020: product revenue 'primarily generated from testing in women's health') into three reported pillars — oncology (Signatera, Altera, Empower, Latitude), women's health (Panorama, Horizon, Vistara, Anora, Fetal Focus) and organ health (Prospera, Renasight) — with the Dec-2025 Foresight Diagnostics deal adding phased-variant MRD technology and lymphoma.
- ✓ 2. Competitive advantage
Natera's sources support a technology/IP and commercial-scale advantage, not a proven margin or return advantage: revenue reached $2.31B in FY2025 and operating cash flow was positive in FY2024-FY2025, but operating income and net income were negative in every year shown. Competition is broad and well-resourced across NIPT, carrier screening, oncology and organ health, and pricing and reimbursement pressure is explicit. The sources do not demonstrate network effects or customer switching costs, so durable advantage is unproven on returns even though patents and test breadth are real differentiators.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 34.1% to $794.0 million, on 22.3% more tests processed and 60.9% oncology test growth, while gross margin was 64.7% versus 64.9%. GAAP operating and net losses narrowed to $68.3 million and $59.9 million, but the quarter included $32.3 million of favorable revenue estimate changes. Cash was $1,097.2 million at September 30, 2026, debt was $80.3 million, and 2026 revenue guidance was raised to $3.005 billion to $3.035 billion.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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