Intel stock spikes after report of possible US government stake
On Wednesday, Mizuho (NYSE:MFG) Securities initiated coverage on Guardant Health (NASDAQ:GH) shares with an Outperform rating and set a price target of $55.00, representing a 25% upside from the current price of $43.87. The precision oncology company, currently valued at $5.4 billion, is recognized for its innovative suite of products aimed at transforming cancer treatment and monitoring. According to InvestingPro data, the stock has delivered impressive returns, gaining over 107% in the past year.
Guardant Health's technology, particularly its Smart Liquid Biopsy platform, stands out from tissue-based competitors, offering a significant advantage in the market. The company has demonstrated strong execution with 31% revenue growth in the last twelve months and maintains a robust 61% gross profit margin. Mizuho analysts highlight the company's immediate access to an almost $20 billion total addressable market (TAM) for Precision Oncology, spanning colorectal, breast, and lung cancer indications.
The firm's positive outlook is further supported by the strong survey responses for Guardant's blood-based colorectal cancer (CRC) test. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, despite current negative EBITDA. Analysts anticipate that the company's cash flow and profitability will benefit from the successful adoption of its products.
The $55 price target set by Mizuho suggests a valuation of approximately 7.5 times the company's expected enterprise value to sales ratio for the fiscal years 2025 and 2026. This valuation is higher than that of its small to mid-size (SMID) industry peers, but Mizuho justifies this premium with Guardant Health's impending sales growth and profit potential. The strong analyst consensus, with targets ranging from $47 to $65, supports this optimistic outlook. Get deeper insights and access to comprehensive financial analysis through InvestingPro's exclusive research reports.
In other recent news, Guardant Health has announced that its Shield blood test for colorectal cancer is now covered by the U.S. Department of Veterans Affairs (VA) for eligible veterans. This coverage is significant as it extends to veterans receiving community care authorized by the VA and includes no copay for average-risk individuals aged 45 and older. Additionally, Guardant Health has partnered with Bayshore HealthCare to offer its cancer diagnostic tests in Canada, enhancing access to advanced screening tools for over 350,000 patients annually. In a strategic operational move, Guardant Health has secured a lease extension for its facilities in Redwood (NYSE:RWT) City, California, through 2031. This extension, valued at approximately $50 million, aligns with the company's financial strategy and operational needs.
TD Cowen has maintained a Buy rating on Guardant Health, with a target price of $56, following the approval of the Shield test as an Advanced Diagnostic Laboratory Test (ADLT). This approval allows for a higher billing rate under Medicare, potentially increasing revenue estimates by 2.5-3% in 2025. The ADLT status is expected to positively impact Guardant Health's financial performance, with a boost in gross margins and a reduction in the burn rate. These developments reflect Guardant Health's ongoing efforts to expand the reach and financial viability of its cancer screening solutions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.