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Why Guardant Health Is Soaring Today

By Brian Feroldi – May 10, 2019 at 11:24AM

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Traders bid up the stock in response to another strong earnings report.

What happened

After it posted blowout quarterly results and raised its guidance, shares of Guardant Health (GH 0.20%), a leader in the burgeoning field of liquid biopsies, rose 17% as of 10:55 a.m. EST on Friday. 

So what

Guardant Health's headline numbers continue to impress:

  • Revenue surged 120% to $36.7 million. That figure blew past the $32.1 million that Wall Street had expected.
  • Gross margin expanded significantly to 63.1% thanks to the sales leverage.
  • Operating costs grew 79% to $46.8 million, which is a slower rate of growth than revenue.
  • Net loss was $26.1 million, or $0.30 per share. This number was lower than the $0.35 per-share net loss that analysts were expecting.
  • Cash balance at year-end was $493 million.

The broad-based prosperity allowed management to significantly raise its full-year guidance. Revenue is now expected to land between $145 million and $150 million. This represents growth of about 63% at the midpoint and is a nice boost from the prior outlook of $130 million to $135 million. It is also much higher than the $134.7 million that Wall Street was expecting.

Money falling from sky buyout takeover riches

Image source: Getty Images.

Traders are cheering the quarterly blowout and big guidance boost.

Now what

Guardant Health has nailed its first few earnings reports as a public company. That's no easy task, so it is understandable that the share price continues to scream higher. 

The company continues to enjoy a lead in a market that promises enormous growth in the years ahead. The potential is so big that growth-loving investors might want to consider nibbling on the stock today, even though it trades at a nosebleed valuation and is more expensive than it was yesterday.

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

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