Buying growth stocks on the cheap can be a great way to build wealth for investors with enough patience. This is because the strategy combines the high return potential of growth investing with the downside protection that comes with value investing.

Diagnostic company Veracyte (VCYT -1.32%) looks like it could be a fit for investors seeking a growth stock at a solid value. Here are three reasons why the stock could be a buy for investors.

1. Tremendous growth continued in the first quarter

Incorporating routine exercise and healthy diets into the lifestyles of as many patients as possible is arguably a major key to making the healthcare system more efficient. As Benjamin Franklin famously said: "An ounce of prevention is worth a pound of cure." 

But when this approach fails, the next best hope is to provide the healthcare system with diagnostic tests that produce accurate and timely results. This can help catch diseases in the early stages of progression while there is still time to successfully treat the patient. And innovative companies like genomic test maker Veracyte are playing a major role in improving the healthcare system.

The company's tests for prostate cancer, lung cancer, breast cancer, and thyroid cancer aid in determining the molecular profile of genes in a patient. That assists in ruling out medically invasive and often unneeded procedures to diagnose a patient and treat a disease, which frees up the healthcare system to deliver adequate health outcomes and move quickly to the next patient. 

Healthcare professionals and hospitals are increasingly recognizing the clinical value of Veracyte's tests across-the-board. This is what propelled the company's total test volume to jump 23.8% over the year-ago period to 28,788 in the first quarter ended March 31. In turn, Veracyte's total revenue surged 21.6% higher year over year to $82.4 million for the quarter. 

Looking ahead, analysts anticipate that the company will deliver double-digit revenue growth for the foreseeable future, including 13.2% in 2023 and 13.5% in 2024. This seems to be a reasonable assumption for at least two reasons.

For one, the company secured four new payer contracts for its Afirma genomic sequencing classifier (i.e., for thyroid cancer diagnosis) during the quarter. These contracts make the test an in-network benefit for over four million more health plan enrollees.

Second, Veracyte presented 17 abstracts for its diagnostic tests at notable medical and research conferences in the quarter. This will further raise awareness and acceptance of Veracyte's tests on the medical facility side of the equation, which could drive higher demand for its products moving forward. 

A person speaks to their doctor.

Image source: Getty Images.

2. Profitability is just around the corner

Veracyte recorded an $0.11 net loss per share for the first quarter, which was a significant improvement over the $0.20 net loss per share in the year-ago period. And analysts expect that this trend will continue in the future. The consensus analyst estimate predicts that the net loss per share will narrow from $0.55 in 2023 to just $0.12 by 2025, which suggests the company could be profitable as soon as 2026.

3. An enticing valuation

Even after rocketing 52% higher in the past 12 months, shares of Veracyte still looks attractively valued. The stock's trailing-12-month (TTM) price-to-sales (P/S) ratio of 5.8 is slightly below its 10-year median ratio of 6. Coupled with its robust growth prospects, this is probably why analysts have an average 12-month price target of $32 -- or 28% higher from its current share price. 

With growing demand for its products, possible profitability ahead, and a reasonable stock valuation, Veracyte could be an attractive addition to long-term investors' portfolios.