Just the other day, we spoke about Exact Sciences (EXAS), and the reasons for which the stock moved aggressively higher. While we made no recommendation to buy the stock at such an elevated price, we were careful to point out that it was another example of Wall Street hyping a stock to unrealistic prices because of “hot product” potential.
While the latest news from the USPSTF is encouraging, the only way a stock like EXAS can stay afloat is if it partners with a larger group in a licensing deal.
What this company is offering is a great, considering its colon cancer test can detect 92% of colorectal cancers and up to 42% of advanced tumors. By far margin, that outpaces an FIT test, which detects such cancer 74% of the time.
Once the hype factor is removed, the stock is likely to slip further. In fact, a day after speaking about the EXAS stock, it did pull back about 8% on Tuesday. We’re likely to see further pullbacks in the stock from here.