XGN · Exagen
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $5.99
Note written ·
Price against the kill line
31.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $5.99, on record since 11 November 2026. The shares are down 38.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $5.99, back over the $5.81 close of 6 November 2026, which would show the shares leading the S&P 500; or 2026 revenue reported above the $75 million top of guidance.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 10 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 18.4
- Revenue, change on a year (%)
- +6.8
- Gross margin (%)
- 58.8
- Operating margin (%)
- −23.9
- Free cash flow, four quarters ($M)
- −13.0
- Net cash, cash less debt ($M)
- 5.3
- Enterprise value to sales (×)
- 1.4
- Free-cash-flow yield (%)
- −12.4
All filed numbers
What Exagen reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 18.4 | +6.8 | 58.8 | −23.9 |
| first filed | 19.9 | +15.9 | 61.3 | −8.6 |
| first filed | 17.3 | +11.7 | 59.0 | −19.7 |
| first filed | 16.6 | +21.8 | 55.4 | −29.9 |
| first filed | 17.2 | +37.9 | 58.4 | −18.0 |
| first filed | 17.2 | +14.2 | 60.4 | −15.3 |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: −18.2 | −6.3 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +8.3 |
| Operating cash flow ($M) | −12.0 |
| Capital spending ($M) | 1.0 |
| Free cash flow ($M) | −13.0 |
| Cash and short-term investments ($M) | 28.1 |
| Debt ($M) long-term debt | 22.8 |
| Net cash, cash less debt ($M) | 5.3 |
| Deferred revenue ($M) +133.3% on a year | 1.4 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 11.5 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 13.8 |
| Market value ($M) | 105 |
| Enterprise value, market value plus net debt ($M) | 100 |
| Enterprise value to sales (×) | 1.4 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 7.6 |
| Free-cash-flow yield (%) | −12.4 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.6% of shares outstanding sold short, 1.8 days of average trading to cover, −4.4% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $569K | $1.2M |
| 12 monthsfrom | $569K | $1.3M |
The thesis
Exagen's shares are more likely to lag the S&P 500 over the next three months than to lead it. The third-quarter report on 10 November 2026 kept 2026 revenue guidance at $72–75 million. It also showed test volume growth slowing to about 2%, a wider per-share loss than analysts expected, and a new $150 million mixed shelf registration. A favourable Medicare coverage decision or a full-year result above the top of guidance would show the call is wrong.
The company reported third-quarter revenue of $18.417 million on 10 November 2026, up 7% from $17.244 million a year earlier. That was barely above the $18.343 million consensus. The per-share loss of $0.25 missed the $0.18 estimate. Guidance was reaffirmed, not raised, against a $73.886 million full-year consensus. On the call, management said only that the midpoint "felt comfortable" (Investing.com, 10 November 2026).
The market's verdict is in the closes. The shares closed at $7.10 on 9 November 2026, at $5.26 on 10 November 2026 and at $5.04 on 11 November 2026. That last close is below the 200-day moving average of $5.12. Canaccord Genuity kept its Buy rating but cut its target to $9 from $11 on 11 November 2026. The price now reflects a slower-growth, cash-consuming lab business more than the August revenue beat.
Bullish and bearish views on Exagen Inc.
The bull case on Exagen Inc. (XGN), in brief: pricing rose for a 14th quarter. The bear case: volume growth slowed sharply.
Bull case
- Pricing rose for a 14th quarter. The trailing-twelve-month average selling price of AVISE CTD, the company's main autoimmune test, reached $451 per test in Q3 2026, up $10 from $441 a year earlier (8-K and 10-Q, 10 November 2026).
- Guidance held through the quarter. Exagen reiterated 2026 revenue of $72–75 million on 10 November 2026, with nine-month revenue of $55.7 million, up about 11%.
- Losses are narrowing over nine months. The nine-month adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss was $4.206 million, against $6.124 million a year earlier (8-K, 10 November 2026). Management still targets adjusted EBITDA breakeven at about $80 million of annual revenue.
- A 10% owner bought into the fall. Director Jorey Chernett bought 15,585 shares at an average of $5.85 on 9 November to 10 November 2026, after a 14,000-share purchase at $7.46 on 19 October 2026 (SEC Form 4 filings).
- A second test is close to launch. Clinical and analytical validation of the myositis panel finished in October, and launch remains set for early 2027 (Q3 call, 10 November 2026). A myositis webcast is scheduled for 15 December 2026.
Bear case
- Volume growth slowed sharply. AVISE CTD volume grew about 2% year over year in Q3 2026, against 11% in Q2 and 8% for the nine months. The finance chief cited a tougher comparison and fewer clinic days (Q3 call, 10 November 2026).
- Price gains are shrinking. Year-over-year growth in the trailing average selling price fell to 2% in Q3 from 4% in Q2 and 6% in Q1 2026 (company releases).
- Losses widened in the quarter. The Q3 net loss was $6.3 million, against $3.2 million in Q2. The adjusted EBITDA loss was $1.9 million, flat on a year earlier, and gross margin was 58.8% (8-K, 10 November 2026).
- Funding relies on new shares and debt. Exagen raised about $6.5 million through its at-the-market share program in Q3 and drew $5 million from a Perceptive debt facility (Q3 call). It filed a prospectus for a $150 million mixed shelf on 10 November 2026. Cash was $28.1 million at 30 September 2026.
- Medicare coverage is still undecided. The chief executive said there was "no update, no change" on the AVISE CTD local coverage determination from MolDX, the regional Medicare program for lab tests (Q3 call, 10 November 2026). No decision date is public.
- The insider who bought also sold. Jorey Chernett sold 11,265 shares at $6.14 on 6 November 2026, the day of the unexplained 23.6% fall, before buying again on 9 November 2026 (SEC Form 4, filed 10 November 2026).
Price setup
The shares closed at $5.04 on 11 November 2026. That is under the 200-day moving average of $5.12 and well under the 50-day average of $7.84. The 3-month change is −23.5%. The close sits 48.2% below the 52-week intraday high of $9.73 set on 13 November 2025. The 52-week closing low is $2.65, set on 30 March 2026.
The past week ran in two steps. The shares fell from $7.60 on 5 November 2026 to $5.81 on 6 November 2026 with no company news. They recovered to $7.10 on 9 November 2026, then fell to $5.26 after the report on 10 November 2026. The 6 November 2026 close of $5.81 and the $5.85 director purchase average mark the first levels above. Recovering the $7.10 pre-report close would require the market to look past the volume slowdown. The 200-day average is the nearest reference just above the last close.
Catalysts ahead
- 17 November 2026: Craig-Hallum Alpha Select Conference, New York. Management's second investor appearance after the report; any comment on fourth-quarter volume or use of the new shelf would show whether the volume slowdown is seasonal.
- 15 December 2026: Exagen educational webcast on myositis unmet need and pipeline, 12:00 p.m. ET. Sets out the commercial case for the second test due in early 2027, the main route to reducing dependence on AVISE CTD.
- ~31 January 2027 (est.): Myositis validation package due to the New York State Department of Health. A required step before the planned early-2027 launch; a slip would push back the second revenue source.
- ~10 March 2027 (est.): Fourth-quarter and full-year 2026 results. Shows whether 2026 revenue lands inside $72–75M, whether volume growth recovers from about 2%, and what the 2027 outlook is.
What would change the view
A daily close above $5.99, back over the $5.81 close of 6 November 2026, which would show the shares leading the S&P 500; or 2026 revenue reported above the $75 million top of guidance.
What it trades with
Exagen trades mainly on its own test volume, pricing and reimbursement news. Both large moves in the week of 6 November 2026 were company-specific. StockAnalysis listed a beta of 2.24 as of 7 November 2026, so broad market moves tend to be amplified in the shares. The share count can rise through the at-the-market program and the new shelf, which adds supply independent of the market. A MolDX ruling on autoimmune or specialty lab testing would move Exagen alongside other diagnostic lab companies.
The evidence, claim by claim (8)
- Q3 2026 revenue was $18.417M, up 7% from $17.244M in Q3 2025; nine-month revenue was $55.7M; 2026 revenue guidance of $72–75M was reiterated. Exagen Q3 2026 earnings release (8-K) · as of
- AVISE CTD trailing-twelve-month average selling price was $451 per test, up 2% or $10 from $441 in Q3 2025. Exagen Q3 2026 Form 10-Q · as of
- Q3 2026 net loss was $6.336M; adjusted EBITDA loss $1.932M vs $1.895M a year earlier; gross margin 58.8%; cash $28.1M at 30 September 2026. Exagen Q3 2026 earnings release (8-K) · as of
- Q3 2026 loss per share of $0.25 missed the $0.18 estimate; revenue of $18.417M beat the $18.343M estimate; guidance midpoint sits below the $73.886M full-year consensus. Benzinga earnings headlines, 10 November 2026 · as of
- AVISE CTD volume grew about 2% year over year in Q3 2026; Exagen raised about $6.5M via its at-the-market program in Q3 and drew $5M from a Perceptive debt tranche. Q3 2026 earnings call, 10 November 2026 · as of
- Exagen filed a prospectus for a $150M mixed shelf offering. Exagen prospectus filing, reported 10 November 2026 · as of
- Canaccord Genuity maintained Buy on Exagen and lowered its price target to $9 from $11. Benzinga analyst-action headline, 11 November 2026 · as of
- 10% owner Jorey Chernett sold 11,265 shares at $6.14 on 6 November 2026 and bought 15,585 shares at an average $5.85 on 9 November to 10 November 2026. SEC Form 4 filed 10 November 2026 · as of
Sources
- EXAGEN INC. - Form 8-K - FY2026 · sec.gov ·
- EXAGEN INC. - Form 10-Q - FY2026 · sec.gov
- Earnings call transcript: Exagen's Q3 2026 revenue edges past forecasts as shares fall · in.investing.com ·
- Exagen Q3 2026 Earnings Call Transcript · benzinga.com
- EXAGEN INC. - Form 8-K - FY2026 · sec.gov
- Exagen (NASDAQ: XGN) owner buys 14,000 shares in new insider filing · defenseworld.net ·
- Stock Analysis
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