Stephens Starts Coverage On This Precision Oncology Company With 66% Upside

  • Stephens initiated coverage on Guardant Health Inc GH with a price target of $99 and an Overweight rating.
  • The analyst said that Guardant had established itself as a precision oncology market leader by developing differentiated blood-based liquid biopsy tests for cancer patients that span the care continuum. 
  • "We believe the company's leadership position in comprehensive genomic profiling (CGP) will drive stable double-digit organic growth in coming years and provide an established commercial channel for Guardant to cross-sell and accelerate the adoption of new product offerings." 
  • The analyst notes that the ECLIPSE trial represents a key catalyst accelerating top-line growth as Guardant gains access to the multi-billion dollar early cancer screening market for colorectal cancer. 
  • The analyst says the shares are not cheap (trading at ~10x FY23 sales). It takes a long view and believes Guardant's differentiated portfolio, R&D engine, and expertise in blood-based testing will result in the company winning a majority share of the market.
  • Price Action: GH shares are down 0.22% at $59.65 on the last check Thursday.
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