Paramount stock rises after FCC approves Skydance merger
On Tuesday, Guardant Health (NASDAQ:GH), a $4.87 billion healthcare diagnostics company, received a vote of confidence from Raymond (NSE:RYMD) James as analyst Andrew Cooper reiterated an Outperform rating with a $59.00 price target. According to InvestingPro data, the stock has shown significant momentum with an 88.73% return over the past year, despite recent volatility. The endorsement followed Guardant Health’s announcement that its Shield blood test for colorectal cancer (CRC) screening has been granted Advanced Diagnostic Laboratory Test (ADLT) status by the Centers for Medicare & Medicaid Services (CMS). This designation allows Medicare reimbursement at the test’s list price of $1,495 for nine months starting April 1, followed by the weighted average commercial rate through 2026 and 2027.
Guardant Health’s management expects the Shield test to be priced at approximately $580, with around 63% of the volume coming from Medicare at $920 per test. The new ADLT rate, which will be effective starting in the second quarter, is anticipated to add roughly $14 million in revenue, according to Raymond James’ model. This development comes as the company demonstrates strong revenue growth, with InvestingPro showing a 31.04% increase in the last twelve months and maintaining a healthy gross profit margin of 60.79%. This increase is expected to directly impact the company’s bottom line, but it may also prompt management to accelerate investment in commercial infrastructure.
The analyst noted that while the market had anticipated the ADLT status for the Shield test, the timing of the designation was earlier than expected. Previously, the assumption was that such a status would be granted starting in 2026, which limited the projected impact to the latter part of this year. The ADLT status not only validates the uniqueness of the Shield test as the first of its kind but also bolsters the company’s near-term financials, which are likely to be invested in further commercial expansion.
In conclusion, Raymond James’ analysis indicates that the long-term outlook for Guardant Health remains largely unchanged following this development. The firm’s confidence in the stock is supported by the strong performance of Guardant Health’s G360 core, the growing momentum of the Reveal test, and the potential of the Shield test in the market. While the company maintains strong liquidity with a current ratio of 4.68, InvestingPro subscribers can access additional insights, including 8 more key tips and a comprehensive Pro Research Report, providing deeper analysis of the company’s financial health and growth prospects.
In other recent news, Guardant Health announced that its Shield blood test for colorectal cancer screening has received Advanced Diagnostic Laboratory Test (ADLT) status from the Centers for Medicare & Medicaid Services, effective April 1, 2025. This designation allows for a market-based Medicare pricing of $1,495 for the initial nine-month period, with future pricing determined by private payer data. The Shield test, already FDA-approved and covered by Medicare, is expected to see broader adoption as a result. Meanwhile, Guardant Health’s financial performance in the fourth quarter of 2024 met previous forecasts, driven by growth in clinical and biopharma test volumes. The company reported $4 million in revenue from the Shield test and projects $25-30 million in 2025. Analysts have responded positively to these developments, with Canaccord Genuity and BTIG both raising their price targets for Guardant Health to $60, maintaining Buy ratings. Morgan Stanley (NYSE:MS) also increased its price target to $52, reflecting confidence in the company’s growth trajectory. The Reveal test, used for detecting minimal residual disease, is anticipated to gain traction following expanded reimbursement coverage.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.