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Veracyte (VCYT)
NASDAQ:VCYT
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Veracyte
(NASDAQ:VCYT)
61Neutral
Positive Factors
Market Share and Adoption
Decipher has over 65% market share and has driven clinician awareness and adoption with orders increasing across both new and existing accounts.
Revenue Guidance
Core testing revenue guidance came in 3% ($13 million) ahead of consensus and AEBITDA margin guidance was 150 basis points above expectations.
Testing Revenue
The testing business showed continued strength, with Testing revenue growing 24% year-over-year, driven by a 44% increase in Decipher revenue.
Negative Factors
Commercial Product Concerns
Concern exists that Veracyte has only two meaningful commercial products.
French Subsidiary Uncertainty
The strategic review of the French subsidiary could potentially delay IVD timelines.
Product Revenue Decline
Product revenue experienced a year-over-year decline of 18%, impacted by ongoing supply chain issues affecting Prosigna nCounter.
Veracyte (VCYT) vs. S&P 500 (SPY)
Market Cap
$2.31B
Dividend YieldN/A
Average Volume (3M)1.06M
Price to Earnings (P/E)96.4
Beta (1Y)2.17
Revenue Growth23.46%
EPS GrowthN/A
CountryUS
Employees824
SectorHealthcare
Sector Strength65
IndustryBiotechnology
Share Statistics
EPS (TTM)0.31
Shares Outstanding77,944,770
10 Day Avg. Volume893,140
30 Day Avg. Volume1,060,395
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.56
Price to Cash Flow (P/CF)25.30
P/FCF Ratio25.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$44.71Price Target Upside51.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Veracyte Business Overview & Revenue Model
Company DescriptionVeracyte, Inc. is a genomic diagnostics company that leverages advanced genomic technology to improve diagnostic accuracy and outcomes for patients. Operating primarily in the healthcare and biotechnology sectors, the company focuses on developing and commercializing diagnostic tests that aid in the diagnosis of various diseases, particularly in oncology and pulmonology. Veracyte's core products include genomic tests like the Afirma Thyroid FNA Analysis and the Envisia Genomic Classifier, which provide critical genomic insights to guide treatment decisions.
How the Company Makes MoneyVeracyte generates revenue through the sale of its proprietary genomic tests to healthcare providers and institutions. The company's revenue model is primarily based on test volume, with healthcare providers ordering tests for patients who require more precise diagnostic information. Veracyte also partners with pharmaceutical companies and research institutions to provide data and insights derived from its genomic technologies, further contributing to its revenue streams. Additionally, Veracyte may receive reimbursement from insurance companies and government healthcare programs for its diagnostic tests, making these partnerships and reimbursement arrangements significant factors in its earnings.
Veracyte Financial Statement Overview
Summary
Veracyte exhibits strong financial health with significant revenue growth and improving profitability. The company has a healthy gross profit margin and a positive net profit margin. Its balance sheet is robust with low leverage, and its cash flow generation is efficient and growing.Income Statement
Veracyte has shown significant revenue growth from $361.05 million in 2023 to $445.76 million in TTM, indicating a strong upward trajectory. The gross profit margin is healthy at 65.98%, and the net profit margin has turned positive to 5.42% from negative in previous years, signaling improving profitability. EBIT and EBITDA margins are positive at 3.74% and 9.36%, respectively, marking a notable turnaround from prior losses.76
Positive
Balance Sheet
The company's balance sheet is robust with a high equity ratio of 90.47% and a low debt-to-equity ratio of 0.04, reflecting financial stability and low leverage risk. Return on equity is modest at 2.05%, but the strong equity base and low debt levels suggest solid financial health.72
Positive
Cash Flow
Veracyte's cash flow is strong with a significant operating cash flow of $75.10 million and a free cash flow of $63.81 million, both showing substantial growth from the previous year. The operating cash flow to net income ratio is robust at 3.11, indicating efficient cash generation relative to net income.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 445.76M | 361.05M | 296.54M | 219.51M | 117.48M | Gross Profit |
| 298.14M | 248.15M | 194.95M | 145.11M | 76.03M | EBIT |
| 16.14M | -85.80M | -41.08M | -81.90M | -35.39M | EBITDA |
| 49.20M | -49.41M | -6.98M | -60.18M | -25.77M | Net Income Common Stockholders |
| 24.14M | -74.40M | -36.56M | -75.56M | -35.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 289.44M | 216.45M | 178.85M | 173.20M | 349.36M | Total Assets |
| 1.30B | 1.11B | 1.16B | 1.19B | 457.16M | Total Debt |
| 50.74M | 12.63M | 14.72M | 18.85M | 12.32M | Net Debt |
| -188.35M | -203.82M | -139.53M | -154.34M | -337.05M | Total Liabilities |
| 124.07M | 70.80M | 81.22M | 91.31M | 35.93M | Stockholders Equity |
| 1.18B | 1.04B | 1.08B | 1.10B | 421.23M |
| Cash Flow | Free Cash Flow | |||
| 63.81M | 34.26M | -1.01M | -37.00M | -12.55M | Operating Cash Flow |
| 75.10M | 44.22M | 7.54M | -31.62M | -9.71M | Investing Cash Flow |
| -56.27M | 15.11M | -29.39M | -739.21M | -3.84M | Financing Cash Flow |
| 4.90M | 2.84M | 3.49M | 596.32M | 203.59M |
Veracyte Technical Analysis
Negative
29.56
Price Trends
37.11
Negative
38.99
Negative
33.91
Negative
Market Momentum
-1.71
Negative
33.65
Neutral
16.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VCYT, the sentiment is Negative. The current price of 29.56 is below the 20-day moving average (MA) of 31.41, below the 50-day MA of 37.11, and below the 200-day MA of 33.91, indicating a bearish trend. The MACD of -1.71 indicates Negative momentum. The RSI at 33.65 is Neutral, neither overbought nor oversold. The STOCH value of 16.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VCYT.
Veracyte Risk Analysis
Veracyte disclosed 57 risk factors in its most recent earnings report. Veracyte 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
Veracyte Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $983.81M | 17.40 | 19.46% | ― | 19.07% | ― | |
67 Neutral | $19.12B | ― | -19.42% | ― | 56.75% | 59.77% | |
61 Neutral | $2.31B | 96.44 | 2.17% | ― | 23.46% | ― | |
53 Neutral | $8.04B | ― | -37.09% | ― | 10.37% | -389.98% | |
49 Neutral | $12.57B | ― | -30.11% | ― | -2.93% | -4.69% | |
49 Neutral | $5.26B | ― | -4584.47% | ― | 31.04% | 16.91% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
VCYT
Veracyte
29.56
9.05
44.12%
EXAS
Exact Sciences
43.45
-30.29
-41.08%
ILMN
Illumina
78.39
-46.51
-37.24%
CDNA
CareDx
17.70
7.75
77.89%
NTRA
Natera
140.65
48.74
53.03%
GH
Guardant Health
42.47
21.68
104.28%
Veracyte Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -24.90% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in revenue growth and market penetration, particularly with the Decipher test. However, there are notable challenges, including a decline in product revenue and potential operational changes in the French subsidiary that could impact future performance and product availability.Highlights
Record Year for Veracyte
2024 was a record year with Q4 revenue totaling $119 million, marking a 21% year-over-year growth. Full-year total revenue reached $446 million, a robust growth of 23% year-over-year.
Testing Revenue Growth
Testing revenue, which accounts for almost 95% of the business, grew 28% year-over-year, with the fourth quarter showing a 24% increase over the prior year.
Decipher Test Performance
Decipher tests delivered more than 80,000 tests in 2024, a volume growth of 36%. Fourth quarter Decipher volume grew 45% year-over-year to a new record of more than 22,400 tests.
Adjusted EBITDA Margin
The company delivered a full year adjusted EBITDA margin of 20.6% and generated more than $70 million in cash.
Lowlights
Decline in Product Revenue
Product revenue was $3 million, down 18% year-over-year due to continued supply and manufacturing challenges.
Challenges with French Subsidiary
Veracyte is considering no longer funding its French subsidiary, Veracyte SAS, due to declines in biopharma and manufacturing challenges, potentially leading to bankruptcy proceedings.
Impact on Prosigna Manufacturing
The potential change in the French operation could impact the manufacturing and supply of Prosigna nCounter, depending on finding a buyer for this portion of the business.
Company Guidance
In the Veracyte Fourth Quarter and Full Year 2024 Financial Results webcast, the company provided a robust guidance for 2025. Veracyte anticipates testing revenue to grow between 12% to 15% year-over-year, reaching $470 million to $480 million, with an adjusted EBITDA margin improvement of approximately 100 basis points. The company also highlighted significant growth metrics from 2024, including a 21% year-over-year increase in Q4 revenue to $119 million and a 23% rise in full-year revenue to $446 million. Testing revenue, which forms nearly 95% of their business, surged by 28% year-over-year, with Decipher volume growing 36% in 2024 and 45% in Q4 compared to the previous year. For 2025, Veracyte expects to continue its growth trajectory, driven by strategic initiatives such as the expansion of Decipher into metastatic populations, with anticipated volume benefits in the latter half of the year, and maintaining strong growth in the Afirma franchise with high-single-digit revenue growth. Additionally, the company is making strides in international expansion and advancing its MRD platform, while also managing a potential operational shift regarding its French subsidiary.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.