There’s nothing like news of a monster earnings and/or revenue beat to pump a stock’s price higher. That was what happened to cancer-focused biotech Guardant Health (NASDAQ: GH) on Thursday, as its third-quarter earnings release featured far higher-than-expected numbers. The company was rewarded with a more than 13% pop in its share price from a grateful market, easily crushing the 0.7% gain of the bellwether S&P 500 index.
Guardant released its very heartening third-quarter numbers just after market close on Wednesday, and investors were eager to pounce on the stock the following day. Revenue was $191.5 million for the period, bettering the third quarter of 2023’s result by 34%. That was on the back of a 21% increase in the number of clinical tests and a 40% leap in biopharma tests, to respective totals of 53,100 and 10,500.
The biotech company’s non-GAAP (adjusted) net loss narrowed considerably, as it was slightly more than $55 million ($0.45 per share) against the over $79 million deficit of the year-ago quarter.
Both headline results came in far better than analysts expected. On average, they were projecting only $170 million and change for revenue, and a steeper adjusted net loss of $0.74 per share.
It was a beat-and-raise quarter for Guardant, since its trailing fundamentals were accompanied by an increase in revenue guidance. Management now expects the top line to be $720 million to $725 million for full-year 2024, up from its previous forecast of $690 million to $700 million. The company did not provide any bottom-line projections.
Guardant’s standout performance was due mainly to good, old-fashioned volume increases, as indicated by those growth numbers for the diagnostic products. These are clearly resonating with the market, so the company’s optimism — reflected in that top-line guidance hike — feels entirely justified.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Guardant Health. The Motley Fool has a disclosure policy.
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