Is Natera’s 425.8% Three Year Surge Still Supported by Its Growth Story in 2025?

• If you have been wondering whether Natera’s explosive story is already priced in or if there is still value on the table, you are not alone. This is exactly what we are going to unpack here.
• After a 39.9% gain year to date and a 425.8% return over the last 3 years, the stock has cooled slightly in the past week, slipping 2.7%. Even so, it sits well above its 5 year level, up 101.1%.
• Recent months have seen Natera stay in the spotlight as investors focus on its expanding footprint in genetic testing, regulatory milestones and partnerships that reinforce its role in precision medicine. Those developments have helped fuel bullish sentiment, but they also raise questions about how much future growth is already embedded in today’s $224.74 share price.
• On our scorecard Natera only clocks a 1 out of 6 valuation score, which suggests the market may be paying up for its prospects. However, headline multiples are just the starting point. Next we will break down the key valuation approaches, and then finish with a more nuanced way to judge whether the current price reflects Natera’s long term potential.

Natera scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Natera Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and then discounting them back to their present value. For Natera, the model starts with last twelve months free cash flow of about $108.7 Million and uses analyst forecasts for the next few years, then extends those trends further out.

Under Simply Wall St’s 2 Stage Free Cash Flow to Equity model, Natera’s free cash flow is projected to rise to around $2.0 Billion by 2035, with intermediate steps such as $158 Million in 2026 and $747 Million in 2029, before growth gradually tapers. These future $ cash flows are discounted back to today using a required rate of return. This results in an estimated intrinsic value of roughly $250.95 per share.

Compared with the current share price of about $224.74, the DCF suggests Natera is around 10.4% undervalued. This implies the market is not fully pricing in its long term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Natera is undervalued by 10.4%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Natera.

Approach 2: Natera Price vs Sales

For high growth biotechs that are not yet consistently profitable, revenue is often a better anchor for valuation than earnings or book value. As a result, the Price to Sales ratio is the preferred lens here. In general, faster growth and lower perceived risk justify a higher multiple, while slower growth or higher uncertainty argue for a discount.

Natera currently trades on a Price to Sales multiple of about 14.69x, which is higher than both the Biotechs industry average of around 11.76x and the peer group average of roughly 9.10x. To go a step further, Simply Wall St calculates a proprietary “Fair Ratio” of 8.21x. This is the multiple you would expect given Natera’s growth profile, margins, industry, market cap and risk factors.

This Fair Ratio is more informative than simple peer or industry comparisons because it adjusts for Natera’s specific fundamentals rather than assuming all biotechs deserve similar valuations. Comparing the Fair Ratio of 8.21x with the current 14.69x suggests the stock is trading at a notable premium to what those fundamentals would justify.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1455 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Natera Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Natera’s story to a concrete forecast and fair value estimate. A Narrative is your own storyline for the company that sits behind the numbers, spelling out how you think revenue, earnings and margins will evolve and what you believe the business is really worth. On Simply Wall St’s Community page, Narratives are an easy, accessible tool used by millions of investors to turn that story into a financial forecast, which then produces a Fair Value you can compare with today’s share price to help inform a decision about whether to buy, hold or sell. Because Narratives are dynamically updated when new information such as earnings, clinical results or regulatory news arrives, your fair value stays aligned with the latest data rather than going stale. For example, one Natera Narrative might lean into rapid diagnostics adoption and clinical developments to support a much higher fair value. Another could focus on reimbursement and competition risks to justify a far lower estimate, helping you see exactly how different perspectives translate into different price targets.

Do you think there's more to the story for Natera? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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