Please ensure Javascript is enabled for purposes of website accessibility

Why Guardant Health Stock Skyrocketed 21% Today

By Keith Speights – Aug 7, 2019 at 5:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Great Q2 results and higher full-year revenue guidance excited investors.

What happened

Shares of Guardant Health (GH 9.80%) skyrocketed 21% on Wednesday. This huge gain came after the precision oncology company announced great second-quarter results after the market closed on Tuesday.

Guardant Health reported Q2 revenue of $54 million, a whopping 178% increase over the prior-year period. The consensus analysts' estimate was for Q2 revenue of $36.4 million. The company also revised its full-year 2019 revenue guidance to between $180 million and $190 million, up from the previous range of $145 million to $150 million. 

Two test tubes with an image of DNA helixes in them

Image source: Getty Images.

So what

CEO Helmy Eltoukhy said in the company's Q2 conference call that to date, its Guardant360 liquid biopsy product "has been ordered by more than 6,000 oncologists more than 100,000 times for patients with advanced cancer to determine their appropriate therapy." He added that Guardant estimates that "clinical adoption of Guardant360 is still only in the mid single digits."

Investors are justifiably excited about the company's strong growth prospects, which were underscored by its better-than-expected performance in the second quarter. It's still very early for liquid biopsies, and Guardant is a clear leader in the market so far.

The company isn't profitable yet, but it's definitely on the right track. It posted a net loss in the second quarter of $11.6 million, or $0.13 per share, versus a loss of $21.6 million, or $1.75 per share, in the prior-year period. 

Now what

It could be interesting to see just how much momentum Guardant picks up over the next couple of years. The company estimates that the potential U.S. market for its products is well over $30 billion.

Its LUNAR assay test is tremendously important for Guardant Health in reaching that big market. The company said that it's on schedule to release a Clinical Laboratory Improvement Amendments (CLIA) validated version of the LUNAR assay for prospective clinical trials by the end of this year, which will give the assay a stamp of approval from the Centers for Medicare and Medicaid Services (CMS).

Guardant also expects that a final Medicare local coverage determination (LCD) could be issued for Guardant360 later in 2019. Both milestones could be significant catalysts for the stock in the near future.

Keith Speights owns shares of Guardant Health. The Motley Fool owns shares of and recommends Guardant Health. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Guardant Health, Inc. Stock Quote
Guardant Health, Inc.
$54.45 (9.80%) $4.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.