3 Reasons We Love Natera (NTRA)

June 20, 2025 at 00:04 AM EDT

NTRA Cover Image

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 5% to $170 per share while the index has gained 1.1%.

Is now a good time to buy NTRA? Find out in our full research report, it’s free.

Why Is Natera a Good Business?

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 791,400 in the latest quarter, and over the last two years, averaged 23.1% year-on-year growth. This performance was fantastic and shows its offerings have a unique value proposition (and perhaps some degree of customer loyalty). Natera Tests Processed

2. Adjusted Operating Margin Rising, Profits Up

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Natera’s adjusted operating margin rose by 47.6 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 3.3%.

Natera Trailing 12-Month Operating Margin (Non-GAAP)

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 59 percentage points over the last five years. Natera’s free cash flow margin for the trailing 12 months was 4.7%.

Natera Trailing 12-Month Free Cash Flow Margin

Final Judgment

These are just a few reasons why Natera ranks highly on our list, but at $170 per share (or a forward price-to-sales ratio of 11.3×), is now the right time to buy the stock? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Natera

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