Price Forecast:

Bullish Case: Natera's revenue growth surged 64% year-over-year, bolstered by the Prospera lung test's Medicare coverage and legal victories. Robust demand for oncology tests indicates strong future earnings potential.

Bearish Case: Ongoing patent disputes and a recent $292.5M ruling against Natera pose significant financial risks. Potential dilution from stock offerings may further pressure shareholder value.

Potential Outcomes:

• Legal wins improving outlook (60%)
• Stock dilution impacts returns (70%)
• Medicare coverage enhancing sales (75%)
• Increased competition risk (30%)

Trading Oracle: Consider initiating a bullish long call debit spread targeting the $190 strike, expiration on January 17, 2025. This strategy leverages current implied volatility at 44.4%, capturing potential upside from Natera’s continued revenue growth and upcoming earnings announcements with a high reward:risk profile.

December 11, 2024