What happened
Shares of Guardant Health (GH 1.11%) are up 16.2% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, on the heels of multiple analyst upgrades for the precision oncology stock.
So what
Guardant Health rallied around 7% on Wednesday alone after Piper Sandler analysts upgraded their rating on the stock to overweight from neutral. Piper Sandler also assigned a $40-per-share price target, representing a more than 30% premium to Guardant's current price even after this week's pop. Piper analysts elaborated in a note to clients that Guardant Health's recent sell-off offered investors "a compelling opportunity to own the first mover in liquid biopsy," adding that the company should be able to sustain 20% top-line growth "for a number of years."
Then early Thursday, analysts at Bernstein added fuel to the fire by initiating coverage on Guardant stock with an outperform rating and a $34-per-share price target (the stock closed today at just above $30 per share). Bernstein lauded Guardant's enviable recurring revenue growth, high profit margins, and "locked-in" customer base.
Now what
Indeed, Guardant stock had plunged more than 35% in September before rebounding this week -- and this despite a lack of company-specific news that might otherwise have merited such a steep decline. So it appears that the drop was primarily caused by a combination of economic uncertainty and the broader market's weakness dragging down high-growth healthcare stocks in general. Perhaps it's no surprise, then, that opportunistic analysts would be willing to go out on a relatively short limb by suggesting investors buy the dip.
