Why Guardant Health Is Soaring Today

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

Brian Feroldi
Brian Feroldi
May 10, 2019 at 11:24AM
Health Care

What happened

After it posted blowout quarterly results and raised its guidance, shares of Guardant Health (NASDAQ:GH), 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.