Cautious Outlook on Veracyte: Sell Rating Amid Market Pressures and Execution Risks

Tejas Savant, an analyst from Morgan Stanley, maintained the Sell rating on Veracyte (VCYT – Research Report). The associated price target remains the same with $29.00.

Tejas Savant has given his Sell rating due to a combination of factors impacting Veracyte’s performance and future outlook. Despite a modest beat in product and biopharma revenues, the core testing segment’s performance was only in line with expectations, and the average selling price for tests showed a slight decline. Additionally, while the company’s pipeline shows promise, it remains a ‘show-me’ story, indicating that significant upside is yet to be realized and may take time to materialize.
Furthermore, although there are positive developments such as the clarification of IVD timelines and improved lab efficiency, these are offset by competitive pressures in the market, particularly with the launch of new products like Prosigna LDT. The company’s strategic moves, including the discontinuation of Marseille operations, suggest a focus on optimizing resources, but the overall market environment and execution risks contribute to a cautious outlook, justifying the Sell rating.