Benzinga | May 5, 2021 09:53AM EDT

Invitae Shares Trading Lower As Q1 Earnings Lag Estimates, Contracting Margins

* Invitae Corp (NYSE: NVTA) reported first-quarter FY21 results after the market closed Tuesday, wherein EPS loss of $0.63 came in worse than expectation of $0.59, sales of $103.6 million (+61% Y/Y) managed to beat the consensus of $101.5 million, marginally.

* Invitae reported a billable volume of 259,000 up 72% Y/Y, thus driving the company's test revenue up 57% to $99.3 million.

* However, the cost of revenue grew even faster. Invitae's total cost of revenue soared 87% to $75.5 million. Invitae stated that its average cost per billable unit was $290, up from $268 in the prior-year period.

* Invitae co-founder and CEO Sean George said, "We had a very strong start to the year, experiencing record daily volumes, and we expect that momentum to continue into the coming years." That momentum is likely to be driven in large part by acquisitions, at least in the near term.

* The company closed the ArcherDx acquisition. In April, it announced the acquisition of Genosity, a genomics company focused on deploying complex sequencing-based tests.

* But Invitae is also growing by picking up new business. It signed 25 partnerships with biopharmaceutical companies in the first quarter.

* Cash and equivalents totaled $681.9 million.

* SVB Leerink analyst Puneet Souda maintains Invitae with an Outperform rating but lowered the price target from $65 to $50.

* Price Action: NVTA shares are down 5.71% at $29.7 on the last check Wednesday.