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CareDx (CDNA)
NASDAQ:CDNA
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CareDx (CDNA) AI Stock Analysis

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CareDx

(NASDAQ:CDNA)

Rating:67Neutral
Price Target:
$14.00
▲(7.53%Upside)
CareDx's strong financial performance and positive earnings outlook are significant strengths, supported by a robust balance sheet and strategic initiatives like stock repurchases. However, the current technical indicators point to bearish market sentiment, which tempers the overall score.
Positive Factors
Financial Position
The company had $230.9M in cash and investments, indicating a strong cash position.
Revenue Growth Potential
CareDx has the potential to boost revenue by approximately $125 million over time through expanded payor coverage and revenue capture initiatives.
Stock Valuation
The stock is considered substantially undervalued at the current price, even if the rule is finalized.
Negative Factors
Historical Precedent
A similar scenario in the past resulted in a significant decline in stock value following changes in Medicare coverage guidelines for transplant surveillance testing.
Regulatory Challenges
The proposed LCD limits on test frequency could significantly reduce AlloSure Kidney revenues, which make up a large portion of CDNA's testing revenues.
Testing Protocols
CDNA's current testing protocols are at odds with the proposed LCD, which significantly reduces the number of tests allowed post-transplant.

CareDx (CDNA) vs. SPDR S&P 500 ETF (SPY)

CareDx Business Overview & Revenue Model

Company DescriptionCareDx, Inc. discovers, develops, and commercializes diagnostic solutions for transplant patients and caregivers worldwide. It provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company also offers TruSight HLA, a next generation sequencing (NGS) based high resolution typing solution; Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; and XynQAPI transplant quality tracking and waitlist management solutions, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.
How the Company Makes MoneyCareDx generates its revenue primarily through the sale of its diagnostic tests, including AlloSure and AlloMap, to healthcare providers, hospitals, and laboratories. The company's revenue model is largely based on reimbursement from insurance companies, Medicare, and other payers for these tests. CareDx also earns revenue from partnerships and collaborations with research institutions and pharmaceutical companies, contributing to the development and validation of new testing solutions. Additionally, the company provides digital solutions and services, such as transplant patient management software, which contribute to its overall revenue streams.

CareDx Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: -22.87%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive outlook with strong revenue growth, successful product expansions, and operational improvements. However, the impact of weather on testing volumes and the financial implications of the securities settlement present challenges.
Q1-2025 Updates
Positive Updates
Revenue and Growth Metrics
CareDx reported quarterly revenue of $84.7 million, up 18% year-over-year, and a positive adjusted EBITDA gain of $4.6 million. Testing services revenue was $61.9 million for the quarter, up 15% year-over-year.
Testing Volume Growth
The company achieved its seventh consecutive quarter of sequential testing volume growth, with approximately 47,100 tests conducted in the first quarter, up 12% from the prior year.
Product Launches and Expansions
CareDx launched two expanded indications for AlloSure testing, including AlloSure Heart for pediatric heart transplant patients under age seven and AlloSure Kidney for simultaneous pancreas kidney transplant patients.
Strong Cash Position
The company ended the quarter with a strong cash balance of $231 million and no debt.
Patient and Digital Solutions Growth
Revenue from patient and digital solutions was approximately $12 million in the first quarter, representing 24% year-over-year growth.
Operational Efficiency
Non-GAAP gross margin was 68.5%, up 150 basis points year-over-year, and the company reported an adjusted EBITDA gain compared to a loss in the same quarter last year.
Negative Updates
Weather Impacts on Testing Volumes
CareDx noted that severe weather conditions impacted testing services volumes in the first quarter, reducing performance by approximately 500 to 600 tests.
Securities Class Action Settlement
The company reached an agreement to resolve a securities class action litigation for $20.25 million, with an anticipated out-of-pocket expense of approximately $5.4 million.
Increased Operating Expenses
Non-GAAP operating expenses for the first quarter were $55.5 million, compared with $52.3 million in the same quarter last year, driven by investments in sales and marketing.
Company Guidance
During the CareDx first quarter 2025 earnings call, the company reiterated its 2025 guidance of $365 million to $375 million in revenue and an adjusted EBITDA gain between $29 million and $33 million. The first quarter reported revenue was $84.7 million, marking an 18% year-over-year increase, with a positive adjusted EBITDA of $4.6 million. Testing services generated $61.9 million, a 15% rise from the previous year, with a volume of approximately 47,100 tests, up 12%. CareDx ended the quarter with a cash balance of $231 million and no debt. Additionally, they launched two expanded indications for AlloSure and added 3.5 million new covered lives for AlloMap Heart and 15.5 million for AlloSure testing. The company also saw a 24% growth in patient and digital solutions revenue and a 26% growth in product revenue.

CareDx Financial Statement Overview

Summary
CareDx demonstrates strong financial health with significant revenue growth and improved profitability. The balance sheet is solid, characterized by low leverage and a strong equity position. Cash flow generation has improved, although some volatility remains. Overall, the company is on a positive trajectory with potential for sustained growth, though careful management of cash flow fluctuations is advised.
Income Statement
76
Positive
CareDx shows a strong revenue growth trajectory, with a notable increase in total revenue from $280.3M in 2023 to $346.4M in TTM (Trailing-Twelve-Months), reflecting a robust growth rate. The gross profit margin is healthy at 67.5% for TTM, indicating effective cost management. The net profit margin has improved significantly to 17% in TTM, showcasing enhanced profitability. However, historical EBIT and EBITDA margins have been volatile, with recent improvements suggesting a positive turnaround.
Balance Sheet
82
Very Positive
The balance sheet is strong with a low debt-to-equity ratio of 0.08, indicating low leverage and financial stability. The equity ratio stands at 77.5%, reflecting a solid equity base. Return on equity (ROE) has improved to 15.5% in TTM, highlighting effective use of equity to generate profits. The company's liquidity position is robust, with substantial cash reserves exceeding total debt.
Cash Flow
70
Positive
Cash flow analysis reveals a positive trend, with free cash flow turning positive to $25.1M in TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.45, suggesting moderate cash conversion efficiency. However, the free cash flow growth rate has been inconsistent, requiring careful monitoring.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue333.79M280.32M321.79M296.40M192.19M
Gross Profit224.16M178.32M209.58M199.01M129.08M
EBITDA-33.99M-89.66M-61.22M-17.84M-10.21M
Net Income52.55M-190.28M-76.61M-30.66M-18.71M
Balance Sheet
Total Assets491.05M466.83M542.99M566.62M368.51M
Cash, Cash Equivalents and Short-Term Investments260.65M235.42M293.09M348.49M224.70M
Total Debt28.37M34.22M39.00M17.39M16.07M
Total Liabilities112.62M205.50M112.08M100.75M90.83M
Stockholders Equity378.43M261.33M430.91M465.88M277.68M
Cash Flow
Free Cash Flow31.56M-27.63M-49.57M-39.55M23.07M
Operating Cash Flow38.05M-18.39M-25.24M-19.29M33.43M
Investing Cash Flow-483.00K40.45M-228.50M47.71M-100.39M
Financing Cash Flow-5.61M-29.61M-4.54M185.64M163.15M

CareDx Technical Analysis

Technical Analysis Sentiment
Negative
Last Price13.02
Price Trends
50DMA
17.95
Negative
100DMA
18.07
Negative
200DMA
20.92
Negative
Market Momentum
MACD
-1.31
Positive
RSI
30.22
Neutral
STOCH
16.19
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDNA, the sentiment is Negative. The current price of 13.02 is below the 20-day moving average (MA) of 18.00, below the 50-day MA of 17.95, and below the 200-day MA of 20.92, indicating a bearish trend. The MACD of -1.31 indicates Positive momentum. The RSI at 30.22 is Neutral, neither overbought nor oversold. The STOCH value of 16.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CDNA.

CareDx Risk Analysis

CareDx disclosed 65 risk factors in its most recent earnings report. CareDx reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

CareDx Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$724.96M11.3021.57%25.92%
64
Neutral
$471.20M30.59-1.20%38.43%86.19%
52
Neutral
$541.29M-3.61%1.71%76.00%
52
Neutral
$7.46B-0.04-63.82%2.49%16.43%<0.01%
NENEO
51
Neutral
$803.05M-8.57%10.10%8.79%
45
Neutral
$52.76M-1454.41%35.76%47.48%
43
Neutral
$412.03M-13.84%7.38%60.45%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CDNA
CareDx
13.02
-5.98
-31.47%
MYGN
Myriad Genetics
4.59
-23.42
-83.61%
NEO
NeoGenomics
6.42
-8.51
-57.00%
FLGT
Fulgent Genetics
18.63
-3.76
-16.79%
CSTL
Castle Biosciences
16.32
-3.97
-19.57%
BDSX
Biodesix
0.36
-1.29
-78.18%

CareDx Corporate Events

Executive/Board ChangesShareholder Meetings
CareDx Stockholders Approve Key Proposals at Annual Meeting
Neutral
Jun 12, 2025

On June 12, 2025, CareDx, Inc. held its Annual Meeting of Stockholders where several key proposals were voted upon. The stockholders approved the election of two Class II directors, Fred E. Cohen and R. Bryan Riggsbee, the ratification of Deloitte & Touche LLP as the independent accounting firm, the executive compensation on an advisory basis, and an amendment to the 2024 Equity Incentive Plan.

The most recent analyst rating on (CDNA) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on CareDx stock, see the CDNA Stock Forecast page.

Stock BuybackBusiness Operations and Strategy
CareDx Announces New $50 Million Stock Repurchase
Positive
Jun 3, 2025

On May 30, 2025, CareDx‘s Board of Directors authorized a new $50 million stock repurchase program to be executed over the next 24 months, following the completion of a previous $50 million repurchase. This decision comes after CareDx completed the repurchase of approximately 5% of its outstanding shares, reflecting the company’s strong financial position with $231 million in cash and no debt. The repurchase is part of CareDx’s strategy to return value to shareholders while continuing to invest in growth and innovation, as evidenced by their seventh consecutive quarter of testing services volume growth and an 18% year-over-year increase in first-quarter revenue.

The most recent analyst rating on (CDNA) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on CareDx stock, see the CDNA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 22, 2025