Natera (NTRA) rolled past Wall Street expectations in reporting its fiscal Q4 revenue late last week, even narrowly topping its preliminary guidance, positioning the genetic testing company to keep positively surprising investors with its 2025 financial performance, analysts at Morgan Stanley said Wednesday in a research note.

The Morgan Stanley analysts increased their price target for Natera to $185 per share from $176 while keeping their overweight rating for the company's stock. Their optimism is fueled by the company forecasting at least 10% revenue growth during 2025 over year-ago levels, also topping the consensus view "with ample room for upside," they wrote.

Natera's guidance is built on the company's expectations for moderate growth for its Signatera ctDNA diagnostic tests to detect genetic material released by cancer cells into the bloodstream along with steady volume growth for its women's health and its Prospera organ health testing units, the analysts wrote.

They also anticipate "a very strong" Q1 for Women's Health before slowing somewhat during Q2 but regaining its prior momentum over the second half of the year, while explaining its Signatera and Prospera units have typically shown less seasonality and instead are affected by the number of receiving days each quarter.

Natera also is expected to soon seek US Food and Drug Administration approval for an FDA-grade validation trial for its genetic test for advanced adenoma ahead of likely applying for regulatory approval in 2027, the Morgan Stanley analysts said. Once approved, the company may find a national distributor to assist with market adoption, create a direct sales channel or pursue a combination of the two "to commercialize the test without significantly impacting (its) operating expenses," they said.

Price: 144.00, Change: +1.65, Percent Change: +1.16