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Veracyte (VCYT)
NASDAQ:VCYT
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Veracyte (VCYT) AI Stock Analysis

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VCYT

Veracyte

(NASDAQ:VCYT)

Rating:70Outperform
Price Target:
$33.00
▲(6.45% Upside)
Veracyte's overall stock score reflects strong earnings call performance and improving financial health, offset by technical indicators suggesting potential overbought conditions and high valuation concerns. The company's robust revenue growth and strategic product launches are significant strengths, while cash flow management and valuation present notable risks.
Positive Factors
Financial Performance
Veracyte's second-quarter results were positive across all key core metrics and updates.
Revenue Growth
Decipher momentum continues with 24% year-over-year revenue growth, while Afirma also saw solid performance in the quarter.
Negative Factors
Market Competition
The rapidly evolving competitive and IP dynamics in the MRD market bear watching.
Reimbursement Challenges
Nasal Swab reimbursement is unlikely to fall in place until 2028 or later, considering the NIGHTINGALE enrollment expected to complete in 3Q25.

Veracyte (VCYT) vs. SPDR S&P 500 ETF (SPY)

Veracyte Business Overview & Revenue Model

Company DescriptionVeracyte, Inc. operates as a diagnostics company worldwide. The company offers Afirma Genomic Sequencing Classifier and Xpression Atlas, which are used to determine patients with indeterminate results are benign to avoid unnecessary surgery; Decipher Prostate Biopsy and Radical Prostatectomy for prostate cancer diagnosis; Prosigna Breast Cancer Assay for breast cancer diagnosis; Percepta Genomic Sequencing Classifier and Percepta Nasal Swab Test for lung cancer diagnosis; Envisia Genomic Classifier for diagnosing interstitial lung disease, including idiopathic pulmonary fibrosis; and Immunoscore Colon Cancer test for colon cancer diagnosis. It is also developing Percepta Genomic Atlas to help inform lung cancer treatment decisions; Envisia Classifier, the nCounter analysis system; and LymphMark for lymphoma subtyping test. Veracyte, Inc. has technology licensing and collaboration arrangements with Johnson & Johnson; Acerta Pharma; and CareDx. The company was formerly known as Calderome, Inc. and changed its name to Veracyte, Inc. in March 2008. Veracyte, Inc. was incorporated in 2006 and is headquartered in South San Francisco, California.
How the Company Makes MoneyVeracyte generates revenue primarily through the sale of its genomic diagnostic tests to hospitals, laboratories, and healthcare providers. The company charges fees for each test processed, which can vary depending on the specific test and the clinical context. Key revenue streams include test volume growth, reimbursement from insurance companies for the tests performed, and direct sales to healthcare organizations. Additionally, Veracyte has established partnerships with various healthcare institutions and payers to facilitate access to its tests and ensure reimbursement, which significantly contributes to its earnings. The company may also engage in research collaborations and licensing agreements that can provide additional revenue opportunities.

Veracyte Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: 29.33%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call reveals a positive outlook for Veracyte, with strong revenue growth driven by Decipher and Afirma tests, successful launch of new products, and an impressive cash position. However, there are challenges such as a decline in product revenue and the impact of the Veracyte SAS sale on future margins.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Veracyte delivered 14% revenue growth year-over-year with total revenue of $130 million. Testing revenue grew 14% year-over-year, or 16% when adjusted for Envisia.
Decipher Volume Growth
Decipher tests delivered approximately 25,500 tests, resulting in a year-over-year volume growth of 28%, marking the 13th consecutive quarter of over 25% year-over-year volume growth.
Adjusted EBITDA Margin Exceeds Expectations
Veracyte achieved an adjusted EBITDA margin of 27.5%, vastly exceeding expectations.
Successful Launch of Decipher Prostate Test
The Decipher Prostate test was launched for use in the metastatic population, with positive feedback from physicians and potential guideline inclusion in the coming years.
Afirma Volume Growth
Afirma’s volume growth increased 8% year-over-year, with approximately 16,950 tests conducted.
Cash Position
The company ended the quarter with $320.7 million in cash and cash equivalents.
Negative Updates
Decline in Product Revenue
Product revenue was $3.6 million, down 8% year-over-year.
GAAP Net Loss
Veracyte recorded a GAAP net loss of $1 million, inclusive of $20.5 million of non-cash impairments related to Veracyte SAS.
Impact of Veracyte SAS Sale
With the sale of the Veracyte SAS manufacturing business and transition to a contract manufacturing model, product gross margins are expected to decline in the second half.
Company Guidance
During the Veracyte Second Quarter 2025 Financial Results Webcast, the company reported a 14% year-over-year revenue growth for Q2, reaching $130 million, driven by a 14% increase in testing revenue, which adjusted to 16% excluding Envisia. Decipher's 25,500 tests represented a 28% volume growth, marking its 13th consecutive quarter of over 25% year-over-year volume growth. The company achieved an adjusted EBITDA margin of 27.5%, surpassing expectations. The Decipher test is projected to exceed 100,000 annual tests and holds a market share of 65% in the prostate testing space. Afirma also saw an 8% increase in volume year-over-year. Veracyte is transitioning Afirma to a more cost-effective sequencing technology and plans to launch Prosigna as an LDT for breast cancer by mid-2026. The company also outlined its strategy to expand its MRD platform, with the first indication being muscle-invasive bladder cancer in 2026 and plans for further expansion starting in 2027. Veracyte raised its 2025 testing revenue guidance to $477-$483 million and increased the adjusted EBITDA margin guidance to 23.5%.

Veracyte Financial Statement Overview

Summary
Veracyte demonstrates solid financial performance with strong revenue and profit growth, improved margins, and a robust cash flow position. The company maintains a low level of debt, enhancing its financial stability. While the ROE is modest, the trajectory of financial improvements suggests potential for continued growth and value creation.
Income Statement
85
Very Positive
Veracyte has shown significant improvement in its financial performance over the years. The Gross Profit Margin for TTM (Trailing-Twelve-Months) is approximately 67.6%, indicating strong cost management. The Net Profit Margin stands at 7.1%, highlighting a positive move from previous losses. Revenue growth is strong, with a 27.9% increase from 2023 to 2024 and a 39.1% increase from 2022 to 2023, indicating robust growth momentum. The EBIT and EBITDA margins have turned positive, showing improved operational efficiency.
Balance Sheet
78
Positive
The company's balance sheet shows a healthy financial position with a strong Equity Ratio of approximately 90.8% for TTM, indicating a low reliance on debt. The Debt-to-Equity Ratio is favorable at 0.04, reflecting low leverage. Return on Equity (ROE) is approximately 2.8%, which is modest but a significant improvement from previous periods of negative ROE. The overall stability is evident, although the company could improve its ROE to enhance shareholder value.
Cash Flow
82
Very Positive
Veracyte's cash flow statements reveal strong cash generation capabilities. The Free Cash Flow for TTM has grown by 22.9% from the previous year, showcasing efficient capital management. The Operating Cash Flow to Net Income Ratio is 2.7, indicating good cash conversion. The Free Cash Flow to Net Income Ratio of 2.4 suggests strong cash flow relative to net income, providing a cushion for future investments and debt servicing.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue479.13M445.76M361.05M296.54M219.51M117.48M
Gross Profit322.51M289.55M248.15M194.95M145.11M76.03M
EBITDA58.75M49.20M-49.41M-6.98M-60.18M-25.77M
Net Income26.34M24.14M-74.40M-36.56M-75.56M-35.85M
Balance Sheet
Total Assets1.34B1.30B1.11B1.16B1.19B457.16M
Cash, Cash Equivalents and Short-Term Investments320.72M289.44M216.45M178.85M173.20M349.36M
Total Debt50.65M50.74M12.63M14.72M18.85M12.32M
Total Liabilities123.05M124.07M70.80M81.22M91.31M35.93M
Stockholders Equity1.22B1.18B1.04B1.08B1.10B421.23M
Cash Flow
Free Cash Flow55.19M63.81M34.26M-1.01M-37.00M-12.55M
Operating Cash Flow65.21M75.10M44.22M7.54M-31.62M-9.71M
Investing Cash Flow-160.02M-56.27M15.11M-29.39M-739.21M-3.84M
Financing Cash Flow-7.19M4.90M2.84M3.49M596.32M203.59M

Veracyte Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.00
Price Trends
50DMA
26.57
Positive
100DMA
28.03
Positive
200DMA
33.54
Negative
Market Momentum
MACD
1.27
Negative
RSI
68.05
Neutral
STOCH
76.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VCYT, the sentiment is Positive. The current price of 31 is above the 20-day moving average (MA) of 27.31, above the 50-day MA of 26.57, and below the 200-day MA of 33.54, indicating a neutral trend. The MACD of 1.27 indicates Negative momentum. The RSI at 68.05 is Neutral, neither overbought nor oversold. The STOCH value of 76.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$2.33B88.642.24%19.91%
68
Neutral
$1.83B283.562.59%16.13%670.90%
59
Neutral
$1.47B-39.36%83.88%15.24%
51
Neutral
$7.82B-0.16-39.78%2.19%21.38%-1.56%
48
Neutral
$2.88B-37.65%-29.45%
45
Neutral
$2.58B-77.58%-48.38%
41
Neutral
$3.38B-40.29%-208.46%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VCYT
Veracyte
31.00
-1.33
-4.11%
VCEL
Vericel
37.03
-12.91
-25.85%
ARDX
Ardelyx
6.11
-0.20
-3.17%
XENE
Xenon
38.84
-1.99
-4.87%
IMVT
Immunovant
15.24
-16.77
-52.39%
MLTX
MoonLake Immunotherapeutics
55.89
7.73
16.05%

Veracyte Corporate Events

Executive/Board ChangesShareholder Meetings
Veracyte Stockholders Approve Key Decisions at Annual Meeting
Neutral
Jun 18, 2025

Veracyte‘s stockholders convened for their Annual Meeting, where they elected seven directors to serve until the 2026 annual meeting. Additionally, they ratified Ernst & Young LLP as the independent registered public accounting firm for 2025 and approved the compensation of the company’s named executive officers on a non-binding advisory basis. Stockholders also decided that future advisory votes on executive compensation will occur annually, aligning with the company’s recommendation. Furthermore, the 2023 Plan Amendment received approval.

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: Aug 19, 2025