CareDx (CDNA) AI Stock Analysis

• Market Cap: $952.69M
• Dividend Yield: N/A
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.78
• Revenue Growth: 25.92%
• EPS Growth: N/A
• Country: US
• Employees: 644
• Sector: Healthcare
• Sector Strength: 43
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -0.19
• Shares Outstanding: 55,680,550
• 10 Day Avg. Volume: 1,625,381
• 30 Day Avg. Volume: 1,224,441
• PEG Ratio: 1.24
• Price to Book (P/B): 2.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.64
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $28.00
• Price Target Upside: 63.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $20.00 ▲( 16.89% Upside)

CareDx's strong financial performance and positive earnings call sentiment drive its score, highlighting solid revenue and profit growth. Despite technical analysis indicating potential resistance levels, the company's valuation remains attractive, supporting its growth prospects. Challenges from past financial volatility and recent legal settlements require monitoring but do not overshadow the positive outlook.

Positive Factors

Financial Position

The company had $230.9M in cash and investments, indicating a strong cash position.

Revenue Growth

Total revenue was $84.7M, representing 17.5% YoY growth and beating our projection of $84.0M.

Valuation

Shares of CDNA are trading at a roughly 2-turn discount to its peers, suggesting the stock is undervalued given its strong market position and positive cash flow.

Negative Factors

Investment Risks

Investment risks include failure of AlloMap and AlloSure tests to achieve commercial success due to market size, penetration rate, reimbursement and/or competition.

Legal Challenges

The District Court overturned the jury verdict in patent litigation brought by a competitor and ruled that the patents asserted against CareDx are invalid.

Stock Performance

Shares of CDNA are off 9% after the company delivered an in-line Q1 and reiterated its full-year guidance, which is viewed as a significant overreaction for an in-line quarter.

CareDx Business Overview & Revenue Model

Company Description

CareDx, 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 Money

CareDx generates revenue primarily through the sale of its diagnostic testing services and products tailored for transplant patients. The company's key revenue streams include the AlloSure and AlloMap tests, which are proprietary molecular diagnostic solutions utilized to monitor organ transplant recipients. These tests are designed to detect organ rejection and assess the health of transplanted organs, thus improving patient management and outcomes. CareDx also earns income from partnerships and collaborations with healthcare providers, research institutions, and pharmaceutical companies, which contribute to its service offerings and market reach. Additionally, the company offers digital health solutions that provide patient management tools and data analytics services, adding to its revenue portfolio. The combination of these diverse revenue streams enables CareDx to maintain a robust financial model focused on innovation and superior patient care.

CareDx Financial Statement Overview

Summary

CareDx demonstrates strong financial performance with robust revenue growth, improved profit margins, and operational efficiency. The balance sheet is solid with low leverage, and cash flow is healthy despite historical volatility. However, increasing liabilities warrant monitoring.

Income Statement

CareDx has demonstrated strong revenue growth with a TTM total revenue of $346.4M, up from $333.8M in the previous period. The gross profit margin is robust at 75.6%, and the net profit margin has improved to 17.0%, highlighting enhanced profitability. EBIT and EBITDA margins are positive at 13.5% and 19.1%, respectively, indicating operational efficiency. However, past periods show some volatility in earnings, which may pose a risk if historical patterns repeat.

Balance Sheet

The balance sheet reflects a solid equity base, with a low debt-to-equity ratio of 0.06, suggesting conservative leverage. Return on equity has improved to 15.5%, indicating efficient use of equity to generate profits. The equity ratio stands at 77.5%, underscoring financial stability. Despite these strengths, the company's total liabilities show some increase over time, which warrants monitoring.

Cash Flow

CareDx's cash flow is strong, with a TTM free cash flow of $26.7M. The operating cash flow to net income ratio is 0.45, reflecting a healthy cash conversion from profits. The free cash flow to net income ratio is 0.45, indicating consistent cash generation relative to earnings. However, past fluctuations in free cash flow highlight potential volatility in cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
346.42M	333.79M	280.32M	321.79M	296.40M	192.19M
	Gross Profit
233.68M	224.16M	178.32M	209.58M	199.01M	129.08M
	EBIT
46.80M	40.77M	-203.36M	-77.23M	-29.73M	-17.71M
	EBITDA
66.33M	-33.99M	-89.66M	-61.22M	-17.84M	-10.21M
	Net Income Common Stockholders
58.85M	52.55M	-190.28M	-76.61M	-30.66M	-18.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
230.92M	260.65M	235.42M	293.09M	348.49M	224.70M
	Total Assets
489.64M	491.05M	466.83M	542.99M	566.62M	368.51M
	Total Debt
30.28M	28.37M	34.22M	39.00M	17.39M	16.07M
	Net Debt
-58.47M	-86.32M	-47.98M	-50.92M	-331.09M	-118.60M
	Total Liabilities
110.29M	112.62M	205.50M	112.08M	100.75M	90.83M
	Stockholders Equity
379.35M	378.43M	261.33M	430.91M	465.88M	277.68M
Cash Flow		Free Cash Flow
25.11M	31.56M	-27.63M	-49.57M	-39.55M	23.07M
	Operating Cash Flow
26.78M	38.05M	-18.39M	-25.24M	-19.29M	33.43M
	Investing Cash Flow
-26.82M	-483.00K	40.45M	-228.50M	47.71M	-100.39M
	Financing Cash Flow
-4.97M	-5.61M	-29.61M	-4.54M	185.64M	163.15M

CareDx Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 17.11 is above the 20-day moving average (MA) of 16.42, below the 50-day MA of 17.56, and below the 200-day MA of 23.14, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 78.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CDNA.

CareDx Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDNA	77 Outperform	$952.69M	14.85	21.57%	―	25.92%	―
CSTL	65 Neutral	$458.78M	30.59	-1.20%	―	38.43%	86.19%
FLGT	59 Neutral	$646.01M	―	-3.61%	―	1.71%	76.00%
Sector *	53 Neutral	$5.14B	3.06	-43.57%	2.81%	16.81%	-0.12%
NEO	52 Neutral	$936.90M	―	-8.57%	―	10.10%	8.79%
MYGN	51 Neutral	$410.19M	―	-13.84%	―	12.15%	61.33%
BDSX	46 Neutral	$39.69M	―	-1454.41%	―	35.76%	47.48%

CareDx Corporate Events

CareDx Updates CFO Severance Agreement Amid Leadership Changes

On March 27, 2025, CareDx, Inc. announced an Amended and Restated Change of Control and Severance Agreement with its CFO, Abhishek Jain. This agreement outlines severance benefits for Mr. Jain in the event of a change of control or termination, impacting the company’s executive compensation structure and potentially influencing stakeholder perceptions regarding leadership stability.

CareDx Reports Strong 2024 Financial Results and Growth

CareDx announced its financial results for the fourth quarter and full year of 2024, reporting a 19% increase in total revenue to $333.8 million. The company saw significant growth in testing services revenue and volume, with a notable improvement in net income and adjusted EBITDA compared to the previous year. The company also highlighted its strategic focus on expanding testing services and payer coverage, positioning itself for continued growth in 2025. The Board of Directors authorized a common stock repurchase program of up to $50 million, indicating confidence in the company’s financial health and future prospects.