Natera, Inc. (NTRA): A Bull Case Theory

Ricardo Pillai

Mon, Jul 14, 2025, 12:39 PM 3 min read

We came across a bullish thesis on Natera on Base by Base's Substack by Edward Larkin. As of 9ᵗʰ July, Natera's share was trading at $158.48. NTRA's forward P/E was -130.98 according to Yahoo Finance.

An oncologist discussing an anti-PD1 therapy option with a patient.

The article discusses the revolutionary potential of circulating tumor DNA (ctDNA) in oncology, particularly in the context of cancer treatment and clinical trials. ctDNA tests are becoming more sensitive and information-rich, enabling the detection of cancer DNA in the blood. This technology has the potential to accelerate clinical trials and change clinical practice. Natera is a key player in this space, with its market-leading Signatera product, which has 90-95% market share in the minimal residual disease (MRD) market. However, the company's high gross margins may be under pressure due to increasing competition and the shift towards ultra-sensitive tests.

The use of ctDNA tests as a proxy endpoint could enable earlier efficacy assessment and accelerate drug development. The technology is expected to continue improving, with new ultra-sensitive tests being developed, such as those by Personalis. Natera's Signatera product has a high limit of detection, but the company is working to improve it. The company's recent launch of Signatera Genome, which looks for 64 variants rather than 16, is an example of this effort. However, investors should be cautious due to the potential for decreasing gross margins.

The ctDNA diagnostics space is highly competitive, with companies like Guardant, Personalis, and Tempus also playing important roles. Guardant's Guardant360 test has a high information content and could become an important MRD test. Personalis' NeXT Personal MRD test is the most sensitive MRD test currently on the market. Tempus has a commercialization agreement with Personalis and stands to benefit if Personalis takes share. The ctDNA diagnostics space is expected to continue growing, with an enormous opportunity in front of the companies involved.

Previously, we covered a bullish thesis on Natera by FJ Research in May 2025, which highlighted key platforms—Signatera™ for monitoring cancer recurrence, Prospera™ for transplant rejection, and Panorama™ for prenatal screening.Edward Larkin discusses Natera's market-leading position in the ctDNA diagnostics space, particularly with its Signatera product, which has 90-95% market share in the MRD market. The company's high gross margins may be under pressure due to increasing competition.