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On Friday, BofA Securities analyst Derik de Bruin increased the price target on Guardant Health shares (NASDAQ:GH) to $56 from the previous $42, while continuing to recommend a Buy rating for the stock. The company, currently trading at $47.40 with a market capitalization of $5.85 billion, has shown remarkable momentum with a 109% return over the past year, according to InvestingPro data. The adjustment comes as Guardant Health provided its fiscal year 2025 (FY25) sales forecast, projecting revenues between $850 million and $860 million, marking a year-over-year increase of 15-16%. This guidance aligns closely with the estimates from both BofA and the wider financial community, which stand at $854 million and $850 million, respectively.
The anticipated growth in oncology is positioned at approximately 15% year-over-year, with the company expecting a significant acceleration in volume growth to around 25% in FY25. This surge is attributed to the performance of its products G360, Shield, and the transition of Reveal™ to single liquid biopsy (SLB). The company’s strong growth trajectory is evidenced by its impressive 31% revenue growth in the last twelve months. InvestingPro subscribers can access 8 additional key insights about Guardant Health’s growth prospects and financial health. Furthermore, Guardant Health predicts its screening revenue will reach $25 to $30 million, with Shield volume estimated at 45,000 to 50,000 units. Revenue from biopharma and data services is also forecasted to grow at a low double-digit rate.
The company has also observed an uptick in average selling price (ASP), with G360 now priced at $3,000. Shield is anticipated to benefit from increased Medicare pricing, rising to $1,495 from the current $920, while Reveal has recently secured Medicare coverage for colorectal cancer (CRC). Analysts perceive Guardant Health’s sales guidance to be largely consistent with expectations, highlighting positive trends in pricing and test volumes.
In addition to revenue projections, Guardant Health is taking measures to manage its expenses efficiently. Operational expenses are expected to grow by only 8-9% year-over-year, primarily due to sales expansion in the screening segment. With $944 million in cash reserves at the end of fiscal year 2024, the management anticipates a reduced cash burn of approximately $230 million at the midpoint in FY25, which includes an estimated $200 million cash burn related to screening operations. The company maintains a strong liquidity position with a current ratio of 4.68, while analyst price targets range from $34 to $60. For a comprehensive analysis of Guardant Health’s financial health and growth potential, including exclusive Fair Value calculations and detailed financial metrics, explore the full research report available on InvestingPro.
In other recent news, Guardant Health reported fourth-quarter 2024 results that exceeded analyst expectations, with revenue reaching $201.8 million, surpassing the anticipated $186.78 million. This marks a 30% increase year-over-year. The company’s adjusted earnings per share were reported at -$0.62, beating the estimates of -$0.78. Guardant Health’s precision oncology revenue grew 30% to $184.6 million, supported by a 24% increase in clinical test volume and a 16% rise in biopharma tests. For the full year 2024, total revenue reached $739.0 million, reflecting a 31% increase from the previous year. The company has raised its 2025 revenue guidance to $850-$860 million, slightly above the analyst consensus of $850.3 million. This projection represents a 15-16% growth compared to 2024, or 19-20% when excluding non-recurring revenue from 2024. Additionally, Guardant Health’s Shield colorectal cancer screening test was selected for inclusion in the NIH Vanguard multi-cancer detection study. Despite these positive developments, the company’s stock experienced a slight decline in after-hours trading.
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