Sam Boughedda

Investing.com — Clinic genetic testing firm Natera Inc (NASDAQ:) fell 48% following Hindenburg Research’s brief report titled “Natera Pioneers in Deceptive Medical Billing.”

According to the activist research company, Natera, Austin, was “fueled” by misleading sales practices and billing practices that were targeted at expectant mothers, doctors and insurance companies, according to interviews.

Natera used an array of billing frauds to drive sales growth. However, it is still extremely unprofitable. “We expect it’s growth and prospects will quickly fizzle as payers and patients become aware of its practices,” said the report.

Both Raymond James analysts and Canaccord analysts came forward to defend Canaccord following the report. 

Hindenburg also made statements about Natera’s relationships with My Genome My Life Ltd (MGML). Andrew Cooper of Raymond James claimed that his conversations with Natera management contained a “strong deniement” about any inappropriate relationship between MGML and Natera. He did admit that there are still questions.

Canaccord’s Kyle Mikson, Canaccord’s analyst reiterated his Buy rating for Natera and $150 price target. He said Hindenburg was “well-known for publishing reports about stocks that Hindenburg had sold short,” while adding that negative claims were “unfounded.”

The analyst explained that it is important to not take short reports lightly but felt the assertions in this report “appear aggressive at the juncture.”