What Happened?
Shares of diagnostics company Guardant Health (NASDAQ: GH) jumped 5.4% in the afternoon session after several investment firms issued positive ratings, citing the recent FDA approval for the company's G360 assay.
The positive sentiment included Bernstein SocGen Group resuming coverage with an 'Outperform' rating and a $175 price target. Additionally, Goldman Sachs initiated coverage with a 'Buy' rating and a $165 price target, while Wolfe Research started with an 'Outperform' rating and a $150 price target. The analysts' confidence stems from the recent FDA approval of Guardant's G360 assay, a test used in oncology. This approval is significant as it enables the company to operate under a national coverage determination, which can lead to broader insurance reimbursement, rather than relying on local coverage decisions.
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What Is The Market Telling Us
Guardant Health’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 6.1% on the news that its stock hit a 52-week high following recent U.S. Food and Drug Administration (FDA) approval for its Guardant360 CDx liquid biopsy test.
The test, which analyzes blood samples for signs of cancer, was approved as a companion diagnostic for a specific type of lung cancer. This approval for the largest liquid biopsy panel of its kind spurred positive reactions from analysts, with Mizuho raising its price target to $175 and RBC Capital initiating coverage with an Outperform rating. The positive market sentiment reflects growing investor confidence in the company's future prospects, as evidenced by its 39.6% revenue growth.
Guardant Health is up 48.5% since the beginning of the year, and at $151.11 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Guardant Health’s shares 5 years ago would now be looking at an investment worth $1,202.
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