Billionaire Tom Steyer Backs Natera Inc. as a High-Growth Stock Opportunity
Billionaire investor and former presidential candidate Tom Steyer has made a sizable bet on Natera Inc. (NASDAQ: NTRA), signaling rare, high-conviction interest in the genetic testing firm. Steyer’s fund, Farallon Capital, scooped up more than 1.6 million shares of Natera in Q1 2024, making the company a top holding in his portfolio, according to Yahoo Finance.
Natera specializes in cell-free DNA testing for cancer, women’s health, and organ health — a $50 billion addressable market by some Wall Street estimates. The company’s flagship product, Signatera, is gaining traction as oncologists increasingly order personalized tests to track cancer recurrence and therapy response.
Steyer’s backing stands out. He’s not a sector tourist: Farallon’s bets tend to run concentrated and, historically, he’s favored high-growth disruptors on the brink of mass adoption. His entrance arrives as Natera pivots from R&D-heavy spending towards commercial execution, with management projecting operating leverage and a path to profitability within two years.
A billionaire’s stamp of approval doesn't guarantee upside. But Steyer’s move places Natera on the radar for funds chasing the next high-growth, high-conviction health tech play.
How Tom Steyer’s Investment Could Impact Natera’s Market Position and Stock Performance
Natera shares jumped nearly 7% in the two sessions after Steyer’s stake became public, outpacing the NASDAQ Biotech Index’s 1% gain during the same window. Trading volume spiked 50% above its 90-day average, suggesting Steyer’s buy catalyzed fast-moving institutional and retail flows.
The Steyer effect carries real weight. Investors still remember how his early stake in Tesla, before its 2013 breakout, preceded a wave of hedge fund inflows. If history rhymes, Natera could see fresh momentum from ‘follow the billionaire’ traders and quant funds sniffing for signals.
Natera’s financials show a company in transition: Q1 2024 revenue hit $311 million, up 26% year-over-year. Gross margin improved to 49% from 44% a year prior, as the company scaled its oncology business. Losses remain — net loss narrowed to $94 million from $136 million, but Natera continues to burn cash as it invests in salesforce expansion and R&D.
Few diagnostics players offer Natera’s blend of clinical adoption and reimbursement tailwinds. Its tests are now covered by Medicare for colorectal cancer recurrence monitoring, unlocking a reimbursed patient population that could reach 300,000 annually. Competitors like Guardant Health and Exact Sciences, while larger, lack Natera’s traction in minimal residual disease (MRD) testing, a segment projected to grow over 30% annually.
Steyer’s bet also signals confidence in Natera’s regulatory posture. The company’s pipeline includes applications to expand Signatera into kidney and lung cancer. If successful, these could double its oncology addressable market — and put Natera ahead of rivals still mired in pilot studies or payer negotiations.
Future Outlook: What Investors Should Watch Following Steyer’s Endorsement of Natera
Natera’s next inflection points won’t wait for long. The company expects FDA decisions on its broader MRD panels by early 2025 — a green light would cement its status as the go-to for precision oncology monitoring. Investors should also track adoption rates among large hospital systems, as winning new contracts could materially boost quarterly volumes.
Risks persist. Natera’s cash runway, while extended by a $400 million convertible debt raise last year, could come under pressure if reimbursement rates are cut or competitors catch up on clinical validity. Leadership has promised break-even EBITDA by late 2025, but any slip in execution or regulatory setbacks could trigger a sharp rerating.
Steyer’s involvement may nudge Natera toward more aggressive partnerships or M&A. His network and activist streak could push management to accelerate commercialization or seek strategic alliances with pharma giants. Watch for board changes or activist proposals ahead of the next proxy season.
Bottom line: Investors should keep an eye on quarterly revenue growth, margin expansion, and any regulatory updates on test indications. In a biotech sector starved for high-conviction growth stories, Steyer’s bet on Natera is a signal worth tracking — but it’s the company’s execution over the next 12 months that will determine if this trade pays off.
⚠️ Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
The Bottom Line
- Tom Steyer’s investment signals strong confidence in Natera’s growth prospects, attracting attention from institutional investors.
- Natera operates in a massive $50 billion market for genetic testing, positioning it for potential rapid expansion.
- Steyer’s backing triggered above-average trading activity and share price gains, highlighting the influence of high-profile investors.
