Here's Why CareDX Is on the Move Today

A better-than-expected fourth quarter report is giving investors a reason to cheer.

Cory Renauer
Cory Renauer
Mar 7, 2019 at 3:46PM
Health Care

What happened

Shares of CareDx (NASDAQ:CDNA), a specialized diagnostics company, jumped 16% during morning trading in response to the company's fourth-quarter earnings report. Investors pleased to see continued profitability have driven the stock 9.7% higher as of 3:29 p.m. EST on Thursday.

So what 

For a decade now, CareDx's AlloMap test has been helping heart transplant patients know how many immunosuppressants they should be taking with a blood test instead of a biopsy. AlloMap's popularity during the fourth quarter rose 6% compared to a year earlier, to 4,057 tests recorded.

Check out the latest earnings call transcript for CareDx.

Guy in a suit with a jetpack taking off.

Image source: Getty Images.

CareDx investors are excited because the company's more recently launched kidney rejection test, AlloSure, has already outpaced AlloMap. In the fourth quarter, 4,575 kidney transplant recipients had their blood checked for early signs of rejection with AlloSure, avoiding biopsies in the process.

CareDx already told investors about AlloSure's surge when it reported preliminary results in January. The stock jumped today because adjusted EBITDA climbed from $0.2 million in the third quarter to $0.8 million during the fourth.


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Now what

CareDx expects total revenue to rise from $76.6 million last year to between $105 million and $107 million in 2019. The company didn't provide bottom-line guidance, but the chances of this company posting another significant loss in 2018 look awfully slim. In 2018, the company narrowed its net loss for the entire year to $46.8 million and extinguished all of its debt.

AlloSure's the first noninvasive test for early signs of kidney rejection, and it's only penetrated 3% of its patient population so far. At recent prices, CareDx is trading at 13.2 times forward sales, which isn't bad for a company that just reported total annual revenue 58% higher than a year earlier.

If AlloSure continues to exceed expectations, CareDx shareholders can look forward to some market-thumping gains in the years ahead.