Canaccord raises Guardant Health target to $60, keeps Buy rating

Published 21/02/2025, 13:44
Canaccord raises Guardant Health target to $60, keeps Buy rating

Friday - Canaccord Genuity has increased the price target on Guardant Health (NASDAQ:GH) shares to $60, up from the previous $42, while maintaining a Buy rating on the stock. The adjustment follows Guardant Health’s announcement of its fourth-quarter results for 2024, which aligned with the company’s earlier preannouncement in January. The stock has shown remarkable momentum, delivering a 109% return over the past year and currently trading near its 52-week high of $50.89. InvestingPro analysis shows 8 additional key insights about GH’s performance and outlook.

Guardant Health’s financial performance was bolstered by strong growth in clinical and biopharma test volumes, as well as the continued benefit from prior period cash collections. The company maintains a healthy financial position with a current ratio of 4.68, indicating strong liquidity. In the fourth quarter of 2024, the company reported $4 million in revenue from its Shield product and anticipates generating $25-30 million in 2025, with this forecast being based on relatively conservative average selling price (ASP) assumptions.

The company’s Reveal test, which is used for detecting minimal residual disease (MRD), is expected to reach a turning point due to recent expansions in reimbursement. This development is significant as it could lead to increased adoption and sales of the Reveal test.

In terms of guidance, Guardant Health provided its initial revenue outlook for 2025, suggesting a 19-20% increase over the previous year’s levels. This projection excludes revenue from prior periods in 2024. The company has demonstrated strong growth momentum, with revenue increasing 31.04% over the last twelve months. Canaccord Genuity’s analyst highlighted the company’s established therapy selection business and advancements in MRD and screening as reasons for maintaining a bullish stance on the stock, despite noting the near-term cash burn. The firm believes that Guardant Health’s shares are currently undervalued, considering the company’s market position and potential growth opportunities. For deeper insights into GH’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Guardant Health reported fourth-quarter earnings that exceeded expectations, with total revenues reaching $202 million, surpassing consensus estimates by 7%. The company’s gross margin for the quarter was 62%, which was 2 percentage points higher than expected. For the full year 2024, Guardant Health achieved total revenue of $739 million, marking a 31% increase from the previous year. Looking forward, Guardant Health has raised its 2025 revenue guidance to between $850 million and $860 million, slightly above the analyst consensus of $850.3 million. This projection represents a 15-16% growth compared to 2024.

Analysts from BTIG, Bernstein, Citi, and BofA Securities have all raised their price targets for Guardant Health to $60, with BofA setting theirs slightly lower at $56, maintaining a Buy rating. The upgrades reflect confidence in Guardant Health’s product lineup and its ability to meet its 2025 revenue goals. The company also reported progress with its Shield colorectal cancer screening test, which was selected for inclusion in the NIH Vanguard multi-cancer detection study. Despite these positive developments, Guardant Health’s stock experienced a slight decline in after-hours trading.

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