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Investing.com - Evercore ISI initiated coverage on Caris Life Sciences Inc (NASDAQ:CAI) with an Outperform rating and a $33.00 price target on Monday. The stock, currently trading at $26.51, shows potential upside to analysts’ targets ranging from $31 to $38. According to InvestingPro data, the company commands a market capitalization of $7.4 billion.
The research firm expects Caris to achieve approximately 40% compound annual growth rate over the next three years, with two-thirds driven by reimbursement increases and one-third from volume growth. The company generated revenue of $452.5 million in the last twelve months, with a gross profit margin of 46.7%.
Evercore ISI estimates the market is currently about 40% penetrated and projects it will reach approximately 60% penetration by fiscal year 2027, supporting teens volume growth. The firm noted Caris recently received an updated reimbursement rate for its MI Cancer Seek Tissue Tx that effectively doubled pricing.
The coverage initiation highlighted that Caris gets reimbursed under Clinical Laboratory Fee Schedule (CLFS), subject to PAMA, with current implementation timelines suggesting pricing sustainability through 2030. This pricing environment should drive more than 2000 basis points of gross margin expansion and provides visibility to operating margin breakeven by first half of 2026.
Evercore ISI also pointed to pipeline opportunities in adjacent markets, including multi-cancer screening and MRD testing for cancer recurrence, which Caris expects to launch in the medium term as growth drivers beyond fiscal year 2027. InvestingPro analysis shows the company maintains a "Fair" overall financial health score, though it currently operates at negative EBITDA. Get deeper insights and exclusive financial metrics with InvestingPro’s comprehensive analysis tools.
In other recent news, Caris Life Sciences has been the focus of several major investment firms, all initiating coverage with positive ratings. Citi has started coverage with a Buy rating, citing Caris Life Sciences’ unique financial profile and projecting a revenue of $412 million for fiscal year 2024. TD Cowen also initiated a Buy rating, highlighting a potential 54% compound annual growth rate in sales from 2024 to 2026 and an EBIT margin expansion to over 21% by 2027. JPMorgan provided an Overweight rating, projecting a 33.3% revenue compound annual growth rate from 2025 to 2028 and expecting the company to reach positive adjusted EBITDA by the fourth quarter of 2025. Guggenheim joined with a Buy rating, emphasizing Caris’ comprehensive therapy selection platform as a significant competitive advantage. BTIG also initiated coverage with a Buy rating, noting Caris as a rapidly growing leader in precision oncology lab testing with its FDA-approved tissue-based assay, MI Cancer Seek. Each firm has set price targets ranging from $31.00 to $38.00, reflecting a strong consensus on Caris Life Sciences’ growth potential. These developments underscore Caris Life Sciences’ strategic position in the healthcare diagnostics sector.
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