Natera has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 9.1% to $263.44 per share while the index has gained 7.9%.
Is NTRA a buy right now? Find out in our full research report, it’s free.
Why Are We Positive on NTRA?
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
1. Elevated Demand Drives Higher Sales Volumes
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful Immuno-Oncology company because there’s a ceiling to what customers will pay.
Natera’s tests processed punched in at 1.01 million in the latest quarter, and over the last two years, averaged 19.4% year-on-year growth. This performance was fantastic and shows its offerings have a unique value proposition (and perhaps some degree of customer loyalty). 
2. Adjusted Operating Margin Rising, Profits Up
Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.
Natera’s adjusted operating margin rose by 15.7 percentage points over the last two years, as its sales growth gave it operating leverage. Its adjusted operating margin for the trailing 12 months was 1.9%.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Natera’s margin expanded by 70.8 percentage points over the last five years. Natera’s free cash flow margin for the trailing 12 months was 4.2%.
Final Judgment
These are just a few reasons why we think Natera is one of the best healthcare companies out there. At $263.44 per share (or a forward price-to-sales ratio of 12.9×), is now the right time to buy the stock? See for yourself in our comprehensive research report, it’s free.
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