Veracyte: Strong Near-Term Performance but Execution and Valuation Risks Justify Sell Rating

Analyst Kallum Titchmarsh from Morgan Stanley maintained a Sell rating on Veracyte and keeping the price target at $48.00.

Kallum Titchmarsh has given his Sell rating due to a combination of factors that balance Veracyte’s strong recent performance against concerns about future execution and valuation. While he acknowledges that Veracyte’s fourth-quarter results and 2026 revenue outlook were notably ahead of market expectations, with solid test volume growth in both Afirma and Decipher, he views much of this strength as already reflected in the current share price. He highlights that the company’s guidance for 2026, although robust and ahead of consensus, does not factor in any upside from upcoming pipeline launches, leaving limited room for positive surprise without flawless execution.

Titchmarsh emphasizes that the key risk lies in Veracyte’s ability to successfully commercialize new assays and capture share in markets dominated by established players, such as minimal residual disease testing and U.S. breast cancer diagnostics. In his view, these are still “prove-it” areas where management must demonstrate sustained traction before he can underwrite more optimistic scenarios. As a result, despite appreciating the momentum in the core Afirma and Decipher franchises and the strong preliminary print, he concludes that the risk‑reward profile at current valuation levels is unattractive, leading him to maintain a Sell recommendation.

According to TipRanks, Titchmarsh is a 4-star analyst with an average return of 12.2% and a 56.60% success rate. Titchmarsh covers the Healthcare sector, focusing on stocks such as Guardant Health, Natera, and Veracyte.