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On Tuesday, BTIG raised the price target for Guardant Health (NASDAQ:GH) to $55.00, up from the previous target of $50.00, while maintaining a Buy rating on the stock. The adjustment came as Guardant Health shares soared by 15% in the morning following the announcement that Medicare coverage has been granted for its Guardant Reveal MRD test in the surveillance monitoring setting, marking the first instance of such coverage for the test with an initial application for colorectal cancer. The company, currently valued at $5.2 billion, has demonstrated strong momentum with a 58% return over the past year. InvestingPro data reveals the stock is trading near its 52-week high, with eight additional key insights available to subscribers.
The newly covered 'next-generation' test operates on the company's 'Smart' liquid biopsy platform. Analysts at BTIG believe that this development represents one of the most significant milestones in Guardant Health's history. The positive response from the market is evidenced by the stock price surpassing $40/share for the first time since December 2022. According to InvestingPro analysis, the company maintains a healthy financial position with a current ratio of 6.22, indicating strong liquidity to support its growth initiatives.
The sentiment towards Guardant Health has been on an upward trajectory, as noted in a previous report by BTIG, based on a meeting with the company last week. The Medicare coverage news is expected to elevate investor sentiment even further. BTIG analysts anticipate that this development will positively impact the company's financial projections, although they plan to review their model in the following month.
The price target increase to $55 reflects BTIG's confidence in Guardant Health's growth potential, especially given the new Medicare coverage for its diagnostic test. The firm's analysts reiterated their Buy rating, signaling their continued positive outlook on the company's stock.
In other recent news, Guardant Health has had several significant developments. The company's Guardant Reveal test for colon cancer has been granted expanded Medicare coverage, which is expected to enable more comprehensive monitoring of colorectal cancer patients. This move could allow Guardant Health to tap into a larger segment of the minimal residual disease (MRD) market.
Analysts from Canaccord Genuity, Jefferies, and Piper Sandler have maintained their positive ratings on Guardant Health, reflecting confidence in the company's market position. UBS has also maintained a Buy rating on Guardant Health, naming it as a top pick in the Life Sciences & Diagnostic Tools group.
Guardant Health has announced a partnership with pharmaceutical company Boehringer Ingelheim to seek regulatory approval for Guardant360® CDx, a liquid biopsy test, as a companion diagnostic for zongertinib, Boehringer's investigational drug for non-small cell lung cancer.
Furthermore, Guardant Health is expected to pre-announce its fourth-quarter results soon, providing preliminary insights into revenues and volumes, as well as updates on its product pipeline. The market is particularly interested in the Shield product, anticipating approximately $25 million in Shield revenues for 2025.
Guardant Health's Reveal product could also see a significant uptick if it secures surveillance reimbursement and applies for Advanced Diagnostic Laboratory Test status.
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