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Investing.com - Freedom Capital Markets initiated coverage on Veracyte, Inc (NASDAQ:VCYT) with a Buy rating and a $45.00 price target, representing approximately 28% upside potential. The company, which boasts a robust gross margin of 70.55% and maintains a "GREAT" financial health score according to InvestingPro, has demonstrated strong operational performance.
The research firm bases its valuation on a 5.0x EV/2027E sales multiple for the oncology-focused commercial laboratory, which maintains market-leading positions in prostate and thyroid cancer diagnostics.
Freedom Capital’s revenue estimates for 2025-2027 stand 0-4% above consensus, while adjusted EPS projections are 1-4% higher than current market expectations.
The firm cites Veracyte’s ability to sustain double-digit revenue growth beyond 2027 and further improve its "already group-leading margin profile" as key factors supporting the bullish outlook.
Despite Veracyte stock declining approximately 12% year-to-date, Freedom Capital identifies "multiple near-term catalysts that can improve sentiment" and highlights the "downside protection from the base business and underappreciated longer-term optionality of the pipeline." According to InvestingPro’s comprehensive analysis, which includes detailed Fair Value calculations and over 30 financial metrics, the stock is currently trading near its Fair Value, suggesting balanced risk-reward potential.
In other recent news, Veracyte, Inc. reported a substantial earnings beat for the second quarter of 2025, with earnings per share reaching $0.44, significantly surpassing the anticipated $0.11. The company also reported revenue of $130.2 million, exceeding the forecasted $121.1 million. William Blair reiterated an Outperform rating for Veracyte, highlighting the company’s strong second-quarter performance, which was 8% ahead of consensus estimates. In contrast, Morgan Stanley adjusted its price target for Veracyte from $29 to $28 while maintaining an Underweight rating, citing a solid second-quarter performance driven by the Decipher and Afirma product lines.
Additionally, Veracyte announced the completion of patient enrollment for its NIGHTINGALE clinical trial, which aims to assess the Percepta Nasal Swab test for lung nodule evaluation. The trial involves 2,400 patients across more than 90 centers in the United States, with participants being monitored to evaluate the test’s effectiveness in reducing unnecessary procedures. Moreover, Veracyte will present its first prospective validation data for a molecular signature predicting hormone therapy benefits in men with recurrent prostate cancer at the upcoming ASTRO 2025 conference. These developments reflect Veracyte’s ongoing efforts to advance its diagnostic capabilities and expand its research initiatives.
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