Guardant Health (GH) AI Stock Analysis

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Guardant Health

(NASDAQ:GH)

Rating:57Neutral

Price Target:

$49.00

▼(-1.07%Downside)

Guardant Health's overall stock score is primarily impacted by its financial performance challenges, including high leverage and cash flow issues, despite strong revenue growth. Positive technical indicators and a favorable earnings call provide some support, but valuation concerns remain due to ongoing losses.

Positive Factors

Financial Performance

The company raised its 2025 revenue guidance due to broad-based outperformance and foresees strong growth in Oncology revenue.

Market Adoption

Shield has been included in NCCN colorectal screening guidelines, which is expected to help drive community adoption and commercial payor reimbursement.

Regulatory Approval

Shield MCED received a Breakthrough Device designation from the FDA, highlighting its potential impact in the diagnostics market.

Negative Factors

Competitor Activity

Upcoming blood-based colorectal cancer screening data from a competitor may cause a near-term overhang for Guardant Health shares.

Performance Concerns

The performance of the Shield MCD assay could degrade with a larger pivotal and registrational trial, as observed with other screening assays.

Product Sensitivity

Shield's AA sensitivity of 13% is lower than other recommended colorectal screening modalities.

Guardant Health (GH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.95B

Dividend YieldN/A

Average Volume (3M)2.47M

Price to Earnings (P/E)―

Beta (1Y)1.46

Revenue Growth28.20%

EPS Growth13.87%

CountryUS

Employees1,999

SectorHealthcare

Sector Strength41

IndustryMedical - Diagnostics & Research

Share Statistics

EPS (TTM)-0.77

Shares Outstanding123,888,050

10 Day Avg. Volume2,213,772

30 Day Avg. Volume2,472,771

Financial Highlights & Ratios

PEG Ratio-2.99

Price to Book (P/B)-23.74

Price to Sales (P/S)0.00

P/FCF Ratio-19.53

Enterprise Value/Market Cap1.10

Enterprise Value/Revenue2.30

Enterprise Value/Gross Profit13.82

Enterprise Value/Ebitda-3.86

Forecast

1Y Price Target

$60.71

Price Target Upside22.57% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

Guardant Health Business Overview & Revenue Model

Company DescriptionGuardant Health, Inc. is a leading precision oncology company that specializes in blood tests, data analytics, and advanced technology to improve cancer detection, treatment, and monitoring. The company operates primarily in the biotechnology and healthcare sectors, offering innovative liquid biopsy tests that enable comprehensive genomic profiling of cancer through a simple blood draw. Guardant Health's core products include Guardant360, GuardantOMNI, and Guardant Reveal, which are used for cancer detection, therapy selection, and recurrence monitoring, respectively.

How the Company Makes MoneyGuardant Health generates revenue primarily through the sale of its proprietary liquid biopsy tests to healthcare providers, pharmaceutical companies, and research institutions. The key revenue streams include diagnostic testing services, including Guardant360, GuardantOMNI, and Guardant Reveal, which are billed to insurance companies, healthcare providers, and directly to patients. Additionally, the company partners with biopharmaceutical companies to provide testing services for clinical trials, which offers another significant revenue source. These partnerships help in the development and commercialization of new cancer therapies and diagnostics. Guardant Health's revenue is further supported by its extensive database of genomic information, which it leverages to offer data analytics services and research collaborations.

Guardant Health Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes income from different business units or product lines, highlighting which areas drive growth and profitability, and where strategic focus might be needed.

Chart InsightsGuardant Health's Precision Oncology Testing segment has shown robust growth, with a significant upward trajectory since 2023, reflecting increased test volumes and improved pricing strategies. Despite a decline in Development Services revenue, the company's raised full-year guidance and strong oncology performance underscore its strategic focus on expanding market share. The earnings call highlights a positive outlook with enhanced gross margins and strategic collaborations, although challenges like high cash burn and limited reimbursement for Shield remain. Investors should watch for continued execution on revenue growth and cost management initiatives.

Data provided by:

Main Street Data

Guardant Health Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 4.87%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call reflected a positive sentiment with strong revenue growth across multiple segments, gross margin improvements, and raised full-year guidance. However, challenges such as high cash burn and limited commercial payer reimbursement for Shield were noted.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Guardant Health reported a 21% year-over-year increase in Q1 revenue, totaling $203.5 million.

Oncology Business Performance

Oncology revenue grew 20% year-over-year to $150.6 million with oncology volume increasing 25% to approximately 59,000 tests.

Gross Margin Improvement

Both Reveal and Shield became gross margin positive in Q1 2025, driven by cost reductions and improved ASPs.

Expansion in Screening with Shield

Shield testing revenue reached $5.7 million in Q1, with approximately 9,000 tests conducted. Shield received ADLT status, increasing Medicare price from $920 to $1,495.

Biopharma & Data Growth

Biopharma & Data revenue grew 21% year-over-year, with strategic collaborations including a new agreement with Pfizer.

Raising Full-Year Revenue Guidance

Guardant Health increased its full-year 2025 revenue guidance to $880 million to $890 million, up from $850 million to $860 million.

Negative Updates

Screening Revenue Still Small

Despite strong growth, screening revenue remains a minor component at $5.7 million, requiring further market penetration.

High Free Cash Flow Burn

Q1 2025 free cash flow burn was $67 million, reflecting challenges in reducing cash burn despite growth.

Limited Commercial Payer Reimbursement for Shield

Currently, Shield has limited commercial payer reimbursement, which impacts ASP and revenue growth potential.

Company Guidance

During the Guardant Health Q1 2025 earnings call, the company provided guidance for the fiscal year, highlighting several key metrics and strategic initiatives. Guardant Health raised its full-year revenue guidance to a range of $880 million to $890 million, representing approximately 19% to 20% growth compared to 2024. Oncology revenue is expected to grow by about 18% year-over-year, driven by increased volumes and improved ASPs for Guardant360 and Reveal. The Biopharma & Data business is projected to achieve low double-digit growth, while Shield revenue guidance was increased to $40 million to $45 million, up from $25 million to $30 million, due to higher ASPs following ADLT status and increased test volumes. The company anticipates full-year non-GAAP gross margins between 62% and 63%, with a focus on reducing cash burn and achieving cash flow breakeven by 2028.

Guardant Health Financial Statement Overview

Summary

Despite strong revenue growth, Guardant Health faces significant financial challenges with ongoing net losses, high leverage, negative equity, and cash flow issues. These factors weigh heavily on the financial stability and require strategic changes for improvement.

Income Statement

Neutral

Guardant Health's revenue has seen consistent growth over the years, with a notable increase from $286.7 million in 2020 to $774 million in TTM 2025. However, the company continues to operate at a net loss, with negative EBIT and EBITDA margins, indicating ongoing profitability challenges. The gross profit margin is relatively stable, but the net profit margin remains negative, impacting the overall financial performance.

Balance Sheet

Negative

The balance sheet reveals a highly leveraged position with a significant negative stockholders' equity as of TTM 2025, indicating potential solvency issues. The debt-to-equity ratio is unfavorable due to the negative equity, and the equity ratio shows a lack of equity backing the total assets. This financial structure poses risks to the company's financial health and stability.

Cash Flow

Negative

Guardant Health has struggled with negative operating and free cash flows, although there is a slight improvement in free cash flow growth recently. The operating cash flow to net income ratio is negative, reflecting cash flow challenges relative to its net losses. The company needs to improve cash generation to support its operations sustainably.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
774.00M	739.02M	563.95M	449.54M	373.65M	286.73M
	Gross Profit
474.77M	449.22M	336.90M	293.21M	250.74M	194.19M
	EBIT
-454.95M	-443.59M	-564.73M	-544.38M	-411.00M	-254.95M
	EBITDA
-397.86M	-390.12M	-433.31M	-614.91M	-359.62M	-225.07M
	Net Income Common Stockholders
-416.55M	-436.37M	-479.45M	-654.59M	-384.77M	-246.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
937.02M	839.98M	1.17B	1.01B	932.75M	1.79B
	Total Assets
1.51B	1.49B	1.79B	1.61B	2.20B	2.27B
	Total Debt
1.34B	1.34B	1.35B	1.37B	1.36B	847.86M
	Net Debt
1.12B	810.51M	220.23M	1.23B	868.67M	14.88M
	Total Liabilities
1.56B	1.63B	1.63B	1.55B	1.56B	916.19M
	Stockholders Equity
-44.55M	-139.65M	158.68M	60.18M	645.00M	1.30B
Cash Flow		Free Cash Flow
-304.87M	-274.94M	-345.46M	-386.92M	-284.05M	-157.99M
	Operating Cash Flow
-272.26M	-239.86M	-324.98M	-309.46M	-209.02M	-103.93M
	Investing Cash Flow
13.49M	-261.31M	840.25M	149.82M	-63.16M	-617.09M
	Financing Cash Flow
-66.77M	-996.00K	477.38M	-189.09M	-66.82M	1.41B

Guardant Health Technical Analysis

Technical Analysis Sentiment

Positive

Last Price49.53

Price Trends

50DMA

43.29

Positive

100DMA

43.87

Positive

200DMA

35.93

Positive

Market Momentum

MACD

1.66

Negative

RSI

70.04

Negative

STOCH

90.34

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GH, the sentiment is Positive. The current price of 49.53 is above the 20-day moving average (MA) of 42.19, above the 50-day MA of 43.29, and above the 200-day MA of 35.93, indicating a bullish trend. The MACD of 1.66 indicates Negative momentum. The RSI at 70.04 is Negative, neither overbought nor oversold. The STOCH value of 90.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GH.

Guardant Health Risk Analysis

Guardant Health disclosed 68 risk factors in its most recent earnings report. Guardant Health 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

Guardant Health Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTRA	67 Neutral	$22.36B	―	-18.66%	―	51.50%	53.23%
SHC	66 Neutral	$3.49B	142.73	5.88%	―	2.78%	-54.72%
MEDP	63 Neutral	$8.52B	22.77	65.82%	―	9.87%	32.81%
EXAS	61 Neutral	$10.35B	―	-36.89%	―	11.57%	-315.25%
GH	57 Neutral	$5.95B	―	-4584.47%	―	28.20%	13.87%
Sector *	54 Neutral	$5.31B	3.26	-45.10%	2.79%	16.76%	0.02%
TEM	52 Neutral	$10.75B	―	-1252.79%	―	42.93%	-160.27%

* Healthcare Sector Average

Performance Comparison

Guardant Health

50.09

19.59

64.23%

EXAS

Exact Sciences

56.18

14.04

33.32%

NTRA

Natera

165.22

52.75

46.90%

MEDP

Medpace Holdings

305.90

-91.27

-22.98%

SHC

Sotera Health

12.30

0.17

1.40%

TEM

Tempus AI, Inc. Class A

69.38

32.90

90.19%

Guardant Health Corporate Events

Business Operations and StrategyFinancial Disclosures

Guardant Health Reports Revenue Growth Amid Cash Flow Losses

Neutral

Jan 13, 2025

Guardant Health announced its preliminary, unaudited results for the fourth quarter and full year 2024, reporting a 31% increase in annual revenue driven by strong clinical and biopharma sales. Despite this growth, the company reported a negative free cash flow of $275 million for the full year and cited its strategic focus on expanding its commercial infrastructure following the successful launch of the Shield test, positioning itself for continued growth in the oncology sector.

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.