On Thursday, Barclays (LON:BARC) began coverage on Guardant Health (NASDAQ:GH) shares, assigning an Overweight rating and setting a price target of $60. The new outlook comes as Guardant Health, a precision oncology company, has seen a shift in sentiment following a recent announcement regarding coverage for its minimal residual disease (MRD) surveillance. The stock has demonstrated remarkable momentum, surging 26.5% in the past week and currently trading near its 52-week high of $49.86. According to InvestingPro, this strong performance is part of a broader trend, with additional technical indicators and momentum metrics available to subscribers.
The analyst at Barclays, Luke Sergott, noted that while the opportunity for multiple expansion in the near term (NT) has diminished compared to the previous week, there is still potential for an increase in the stock’s multiple. This optimism is based on the company’s near-term catalyst calendar, which could drive valuation improvements. The company has demonstrated strong revenue growth of 29.2% over the last twelve months, though InvestingPro data indicates it remains unprofitable with a gross profit margin of 60.31%.
Barclays’ price target is grounded on an 8.6x enterprise value/revenue multiple based on Guardant Health’s estimated revenue of approximately $850 million for the year 2025. Sergott anticipates that the company’s revenue growth will be bolstered by a stronger ramp-up in MRD surveillance and screening services, along with favorable average selling price (ASP) trends throughout the year. With a current market capitalization of $5.83 billion, investors seeking deeper insights into Guardant Health’s valuation metrics and growth potential can access comprehensive analysis through the detailed Pro Research Report available on InvestingPro.
Guardant Health’s focus on developing advanced diagnostics for oncology, including liquid biopsies to detect and manage cancer, positions it in a rapidly evolving segment of the healthcare industry. The company’s technology aims to transform cancer management by providing detailed genomic information to help in the selection of personalized treatment options.
The Overweight rating suggests that Barclays expects Guardant Health’s stock to outperform the average return of the stocks analyzed by the firm over the next 12 to 18 months. This rating reflects the analyst’s confidence in the company’s growth prospects and the recent positive developments surrounding its MRD surveillance coverage.
In other recent news, Guardant Health has been making significant strides in the healthcare sector with its Guardant Reveal™ test playing a pivotal role in rectal cancer treatment. The test, as presented at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium, aids in decision-making for organ preservation in node-negative rectal cancer patients undergoing neoadjuvant chemotherapy. The company has also seen a strong revenue growth of 29.2% over the last twelve months.
Analysts from Raymond (NSE:RYMD) James and TD Cowen have maintained their positive outlook on Guardant Health, holding firm with their respective price targets of $39 and $42. BTIG has raised its price target to $55, while Canaccord Genuity reaffirmed its $42 target. This follows the recent announcement of expanded Medicare coverage for Guardant Health’s Reveal test, designed to detect colon cancer recurrence.
The analysts anticipate that these developments will significantly contribute to Guardant Health’s growth, with expectations for a growth rate exceeding 20%. Furthermore, Guardant Health’s partnership with pharmaceutical company Boehringer Ingelheim to seek regulatory approval for Guardant360® CDx, a liquid biopsy test, is also noted as a key development. Investors are looking forward to Guardant Health’s fourth-quarter results for further insights into its financial health and operational progress.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.