What happened

Shares of Guardant Health (NASDAQ:GH), a leading provider of liquid biopsies that detect cancer, had soared 23% as of 3:28 p.m. EST on Monday. There wasn't a single press release or analyst report issued today that can justify the double-digit move. Investors can likely chalk up today's ascent to continued volatility follow this company's IPO in October. 

So what

Guardant Health has only been public for a few weeks, but it is quickly attracting attention from Wall Street. The company has received several "strong buy" ratings from analysts. In response, its stock price is up by more than a third from the date of its IPO. 

Market watchers are excited about Guardant because it has established itself as a leader in the up-and-coming field of precision medicine. The company's Guardant360 technology can diagnose dozens of different types of cancers from a simple blood test. That's a highly appealing prospect considering that traditional diagnostic methods require tissue biopsies (which are more expensive and often require surgery). 

Group of researchers pointing at DNA

Image source: Getty Images.

Recent results show that demand for Guardant's services are taking off. The company's revenue jumped 95% last quarter to $21.7 million. Better yet, the increased volume caused the company's gross margin to more than double to 53.7%

With lots of white space in front of this business, investors have plenty of reasons to believe that its days of hypergrowth are just getting started.

Now what

Guardant health expects its full-year 2018 revenue to land between $82 million and $84 million. Those are tiny numbers compared with the company's current market cap of $3.8 billion, so Wall Street is pricing this business for exceptionally strong growth. That fact will likely amp up the stock's volatility for the foreseeable future. 

That shouldn't scare you away if you believe that Guardant's liquid biopsy technology is a true game changer. Instead, the best move that bulls can probably make today is to nibble on a few shares and ignore the stock's day-to-day gyrations

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool recommends Guardant Health. The Motley Fool has a disclosure policy.