CareDx stock price target cut to $25 at H.C. Wainwright

Monday - H.C. Wainwright analysts have adjusted their price target on CareDx, Inc (NASDAQ:CDNA) to $25.00, down from the previous target of $26.00, while maintaining a Neutral rating on the stock. According to InvestingPro data, the company, currently valued at $1.19 billion, maintains strong financial health with a current ratio of 3.94, indicating robust liquidity. The revision follows CareDx’s recent financial earnings report for the fourth quarter and full-year 2024, which displayed significant growth and a notable reversal of litigation accrual.

CareDx reported a total revenue of $86.6 million for the fourth quarter of 2024, marking a 32% year-over-year (YoY) increase and surpassing the analysts’ expectations of $85.5 million. This growth was primarily driven by the testing services revenue, which climbed to $63.8 million, representing a 37% YoY increase. The company also reported a substantial rise in testing volume to 45,500, up 14% from the same period the previous year. InvestingPro analysis shows the company maintains impressive revenue growth momentum, with a 19.07% increase over the last twelve months and a five-year CAGR of 21%.

The company’s product and digital solutions revenue each contributed $11.4 million. A significant financial highlight was the net income of $87.7 million, or $1.51 per diluted share, which notably exceeded the estimated loss of $32.9 million. This profit was largely due to a $96.3 million reversal of litigation accrual after the District Court invalidated patents asserted against CareDx by a competitor.

For the full year 2024, CareDx’s revenue reached $333.8 million, a 19% YoY growth, with testing revenue accounting for $249.4 million of that total. The net income for the year was reported at $52.5 million, or $0.93 per diluted share. The analysts acknowledged the company’s consistent quarter-over-quarter growth in testing volume throughout 2024 and suggested that this momentum could extend into 2025.

Looking ahead, CareDx’s management has forecasted revenue for 2025 to be in the range of $365-375 million, indicating an approximate 17% YoY growth. The projected market value of the firm has been increased to $1.43 billion, with projected shares outstanding rising to 56.2 million. Trading at a P/E ratio of 23.82, InvestingPro analysis suggests the stock is slightly undervalued relative to its Fair Value, with analyst targets ranging from $23.50 to $40.00. Discover more insights about CareDx and other healthcare stocks in InvestingPro’s comprehensive research reports, available for over 1,400 US equities.

In other recent news, CareDx Inc. reported impressive financial results for Q4 2024, significantly exceeding analyst expectations. The company achieved an earnings per share (EPS) of $0.18, outperforming the anticipated loss of $0.23, while revenue reached $86.6 million, surpassing the forecasted $82.18 million. CareDx’s strong performance included a full-year revenue increase of 19% year-over-year, totaling $334 million, and an adjusted EBITDA gain of $27.8 million, a notable improvement from a $38 million loss in 2023. The company ended the year with a robust cash position of $261 million and no debt, highlighting its financial stability.

Looking ahead, CareDx has set its 2025 revenue guidance between $365 million and $375 million, with expectations of mid-teens test volume growth. The company plans to launch several new products in 2025, including AlloSure Heart for pediatric patients. Additionally, CareDx has expanded its payer coverage, adding millions of new commercial covered lives for its AlloMap Heart and AlloSure tests. The company is also involved in a multi-year initiative with the U.S. Department of Health and Human Services to modernize the organ transplant system.

In terms of legal developments, a district court recently reversed a prior $96 million verdict against CareDx in a patent litigation case, further strengthening the company’s financial position. CareDx’s strategic focus includes reinvesting in business growth opportunities, exploring strategic partnerships, and considering share buybacks. These recent developments reflect CareDx’s commitment to advancing its transplant solutions and achieving long-term profitable growth.

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