Guardant Health stock drops as Shield V2 algorithm update falls short

Investing.com - Guardant Health (NASDAQ:GH) shares declined after Raymond James maintained its Outperform rating and $61.00 price target despite the company’s Shield V2 algorithm update showing less improvement than anticipated. The healthcare company, currently valued at $7.46 billion, has demonstrated strong momentum with a 113% gain year-to-date according to InvestingPro data.

The updated Shield V2 algorithm demonstrated an overall sensitivity increase to 84% from 83%, falling short of bullish expectations that had anticipated performance approaching the high 80s based on early data shared at the 2023 investor day.

Raymond James noted the stock’s double-digit percentage decline following the announcement appeared "a bit overdone," though acknowledged some pullback was understandable after Guardant shares had gained approximately 44% since its second-quarter results.

The research firm emphasized that Shield remains the performance leader for blood-based colorectal cancer screening with first-mover advantage and potential to expand into additional cancer types, providing "somewhat durable" competitive advantages.

Raymond James also highlighted Guardant’s leadership position in blood-based comprehensive genomic profiling and tumor-free minimal residual disease detection, describing both as "large and growing opportunities" that support the maintained Outperform rating despite the modest Shield V2 update.

In other recent news, Guardant Health reported impressive second-quarter 2025 financial results, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of -$0.44, which was significantly better than the anticipated -$0.72, resulting in a 38.89% surprise. Revenue reached $232.1 million, surpassing the forecasted $211.27 million and marking a 9.86% revenue surprise. Consequently, Guardant Health raised its full-year revenue guidance to a growth rate of 24-25% year-over-year, up from the initial 15-16% projection.

Further developments include Scotiabank raising its price target for Guardant Health to $60 from $57, maintaining a Sector Outperform rating based on these strong results. Additionally, the company announced clinical validation results for its updated Shield blood test algorithm for colorectal cancer screening, which demonstrated 84% sensitivity and 90% specificity. The test showed varied sensitivity rates across different cancer stages, highlighting its effectiveness in advanced stages. These updates reflect significant progress in Guardant Health’s offerings and financial performance.

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