Canaccord raises Guardant Health target to $65, maintains Buy

Published 01/05/2025, 13:08
Canaccord raises Guardant Health target to $65, maintains Buy

Thursday, Canaccord Genuity updated its assessment of Guardant Health (NASDAQ:GH), lifting the price target to $65 from the previous $60, while sustaining a Buy rating on the stock. The adjustment comes after Guardant Health’s first-quarter earnings for 2025 surpassed both Canaccord’s projections and the FactSet consensus. The company’s strong start to the year was characterized by a significant increase in revenue and test volume, benefiting from cash collections carried over from previous periods. According to InvestingPro data, the company has demonstrated impressive growth with a 31% year-over-year revenue increase and maintains a healthy current ratio of 4.68, indicating strong liquidity.

Guardant Health’s robust financial results were attributed to widespread growth across its operations, with particular success noted in its Shield test revenue, which exceeded expectations. The firm has enhanced its annual revenue and volume forecasts for the Shield test, citing recent achievements such as the Advanced Diagnostic Laboratory Test (ADLT) status and solid core execution. InvestingPro analysis reveals several more key insights about Guardant Health’s performance and financial health, available in their comprehensive Pro Research Report.

Reflecting on the company’s momentum, Canaccord Genuity remarked on the upward revision of Guardant Health’s revenue guidance for 2025. The new forecast suggests a roughly 23% year-over-year increase, not accounting for revenue from prior periods. This optimistic outlook is underpinned by Guardant’s strong performance in its established therapy selection business, as well as advancements in the fields of minimal residual disease detection and cancer screening.

The analyst from Canaccord Genuity highlighted that despite the near-term cash burn, Guardant Health’s stock remains undervalued. The company’s ongoing progress in its core areas of expertise and the potential for future growth were key factors in maintaining the Buy rating and raising the price target. The analyst’s positive stance is rooted in the belief that the market has yet to fully recognize the value of Guardant Health’s contributions to oncology diagnostics.

In other recent news, Guardant Health Inc. reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of -$0.49, compared to the forecasted -$0.75. The company also reported revenue of $203.5 million, surpassing the anticipated $190.01 million. Guardant Health’s revenue showed a 21% year-over-year increase, driven by strong performance in oncology and biopharma segments. The company launched new products, including the Guardant360 Tissue test, which requires 40% less tissue, highlighting their commitment to innovation. Guardant Health set its full-year 2025 revenue guidance at $880-$890 million, indicating a projected 19-20% growth. Analyst firms did not provide any recent upgrades or downgrades for Guardant Health. Despite strong earnings, the company’s stock fell in after-hours trading, potentially due to broader market trends or investor concerns. Guardant Health maintains strong liquidity with cash and equivalents at $84 million and aims for cash flow breakeven by 2028.

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