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Tuesday, Veracyte, Inc. (NASDAQ:VCYT) received a reiterated Buy rating and a steady price target of $51.00 from Needham. The firm’s analysts highlighted the company’s fourth-quarter performance, which surpassed consensus expectations for revenue and non-GAAP EPS. Although Veracyte’s revenue growth decelerated to 21% in the quarter from 29% in the previous quarter, this was attributed to robust growth in its Decipher and Afirma products, which helped balance declines in Biopharma and Product sectors. The company maintains a "GREAT" overall financial health score according to InvestingPro analysis, with trailing twelve-month revenue reaching $425.3 million.Want deeper insights? InvestingPro subscribers have access to 12 additional ProTips and comprehensive financial analysis for VCYT.
The company chose not to provide full 2025 revenue guidance, citing ongoing evaluations of its French subsidiary’s ownership. However, Veracyte did forecast testing revenue that exceeded consensus estimates. This positive outlook for testing revenue suggests confidence in the company’s core operations, despite the potential challenges presented by the French subsidiary. InvestingPro data shows the company holds more cash than debt on its balance sheet, with seven analysts recently revising their earnings expectations upward for the upcoming period.
In terms of profitability, Veracyte’s non-GAAP gross margin saw a year-over-year decline of 130 basis points. On the other hand, the adjusted EBITDA margin improved significantly, with a year-over-year increase of 690 basis points. The analysts noted that while the French subsidiary might pose a revenue challenge, it is expected to contribute to better margins for Veracyte. Current gross profit margin stands at 69.8%, while analysts predict the company will achieve profitability this year, according to InvestingPro data.
The company’s financial health, as indicated by the latest quarterly report, reflects a balance of growth and profitability. The detailed performance metrics provide investors with a clearer understanding of the company’s operational strengths and areas of concern, particularly regarding its international operations and product segments.
Overall, Needham’s reiteration of the Buy rating and the $51.00 price target signals confidence in Veracyte’s business fundamentals and market position. The company’s ability to navigate headwinds while maintaining growth and improving margins appears to underpin this positive assessment.
In other recent news, Veracyte Inc . reported strong financial results for the fourth quarter of 2024, with earnings per share (EPS) at $0.36, surpassing the forecast of $0.10, and revenue reaching $118.6 million, exceeding expectations by $1.92 million. The company’s DECIPHER test volume grew 36% year-over-year, contributing significantly to this revenue increase. Despite these positive results, Veracyte’s stock fell 8.28% in aftermarket trading, possibly due to strategic uncertainties, including the pause of the Envisia CLIA test and potential restructuring costs in France. The company has projected testing revenue between $470 million and $480 million for 2025, indicating a growth of 12-15%. Veracyte plans to expand its DECIPHER platform and focus on its MRD platform in muscle invasive bladder cancer. Furthermore, analysts from Wolfe Research and Stephens inquired about the company’s capital deployment strategies and guidance for metastatic revenue, reflecting ongoing investor interest. These developments underline Veracyte’s continued focus on growth and operational execution in the healthcare diagnostics sector.
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