Street Calls of the Week
Investing.com - BTIG reiterated a Buy rating and $22.00 price target on CareDx, Inc (NASDAQ:CDNA), highlighting potential upside beyond an anticipated CMS decision. The company maintains a strong financial position with more cash than debt and a healthy current ratio of 3.3x.
The research firm noted that while many investors consider CareDx "dead money" until clarity emerges on a final Local Coverage Determination (LCD) from CMS, expected by mid-2026, there are other important upside sources not reflected in the current stock price. According to InvestingPro analysis, the stock appears undervalued, trading at just 2.2x book value with a P/E ratio of 13.7x.
CareDx recently quantified its "worst case scenario" estimate regarding a CMS decision at no more than 8% of its business, which BTIG believes removes uncertainty about potential impact.
BTIG expects CareDx stock to have a bounce-back year in 2026, though it may rise sooner, noting shares trade at just 1.3x BTIG’s 2026 revenue estimate, below historical peer multiples of 3x-7x.
The research firm also referenced CareDx’s recent comments to CMS aimed at expanding its opportunity in surveillance testing and capitalizing on multi-modality testing opportunities. With revenue growth of 14.7% in the last twelve months and an overall "GOOD" financial health rating from InvestingPro, which offers 8 additional key insights about CDNA’s potential, the company shows promising fundamentals despite market uncertainties.
In other recent news, CareDx Inc. reported its second-quarter 2025 earnings, showing a mixed performance. The company achieved an earnings per share of $0.10, exceeding the forecasted loss of $0.10. However, its revenue of $86.7 million fell short of the expected $90.62 million, resulting in a revenue surprise of -4.33%. BTIG has adjusted its price target for CareDx to $22 from $26, maintaining a Buy rating due to concerns over recent Medicare reimbursement proposals. The firm noted that CareDx’s quarterly results were generally in line with expectations, with the company tightening its full-year guidance range while maintaining the midpoint, projecting revenue of $370 million for an 11% year-over-year growth. Additionally, William Blair initiated coverage on CareDx with a Market Perform rating, highlighting potential for improvement despite challenges such as reimbursement difficulties and patent litigation. These developments reflect ongoing pressures on CareDx, including securities investigations and changes in executive leadership.
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