Guardant Health (GH, Financial) has forged a strategic alliance with Pfizer (PFE) aimed at enhancing the development and commercialization of Pfizer’s oncology portfolio through the use of Guardant’s innovative Infinity smart liquid biopsy platform. This collaboration spans multiple years and seeks to integrate Guardant's suite of liquid biopsy tests into Pfizer’s global clinical studies, thereby evaluating the clinical utility of circulating tumor DNA as an indicator for monitoring therapy responses, along with related blood-based epigenomic analyses.
Furthermore, the agreement will allow Pfizer to access Guardant's liquid biopsy tests within China as part of their global clinical trials that encompass Chinese cohorts. This move builds on Guardant's previous strategic partnership established in July 2022 with Adicon Holdings, a clinical laboratory firm in China, which aims to extend Guardant's testing capabilities to biopharmaceutical companies conducting clinical trials in the region.
The partnership is significant given that cancer is the predominant cause of death in China, accounting for more than three million fatalities in 2020 alone. By leveraging Guardant's advanced liquid biopsy technology, both companies hope to drive innovation in cancer treatment and improve patient outcomes on a global scale.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Guardant Health Inc (GH, Financial) is $55.29 with a high estimate of $65.00 and a low estimate of $20.00. The average target implies an upside of 21.13% from the current price of $45.64. More detailed estimate data can be found on the Guardant Health Inc (GH) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Guardant Health Inc's (GH, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Guardant Health Inc (GH, Financial) in one year is $47.14, suggesting a upside of 3.29% from the current price of $45.64. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Guardant Health Inc (GH) Summary page.
GH Key Business Developments
Release Date: February 20, 2025
- Q4 2024 Revenue: $202 million, a 30% year-over-year increase.
- Full Year 2024 Revenue: $739 million, a 31% year-over-year increase.
- Clinical Revenue Growth: 34% year-over-year.
- Oncology Clinical Volumes: Increased 24% in Q4 and 20% for the full year 2024.
- Garden 360 ASP: Achieved $3000, ahead of the 2028 target.
- Medicare Reimbursement for Reveal: $1,644 per test.
- Biopharma Revenue Growth: 31% year-over-year to $145 million.
- Non-GAAP Gross Margin: 63% in Q4 2024, up from 61% in Q4 2023.
- Non-GAAP Operating Expenses: $757 million for the full year 2024, a 4% increase.
- Adjusted EBITDA: Loss of $258 million for the full year 2024, an improvement of $86 million from 2023.
- Free Cash Flow Burn: $275 million for the full year 2024, an improvement of $70 million from 2023.
- Cash and Equivalents: Approximately $944 million at year-end 2024.
- Convertible Debt Exchange: $600 million extended to 2031 with a 1.25% annual coupon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Guardant Health Inc (GH, Financial) reported a 30% year-over-year revenue growth in Q4 2024, reaching $202 million, with full-year revenue totaling $739 million, a 31% increase.
- The company achieved significant improvements in ASP for its Guardant 360 test, reaching $3000, four years ahead of its target, due to reimbursement wins.
- Guardant Health Inc (GH) received FDA approval and Medicare coverage for its Shield blood test for CRC, opening a large market for early cancer detection.
- The company successfully reduced costs for its Reveal test by over 50%, which will save tens of millions of dollars in 2025.
- Guardant Health Inc (GH) expanded its biopharma partnerships to over 180, contributing to a 31% revenue growth in its biopharma segment in 2024.
Negative Points
- Despite strong demand, Guardant Health Inc (GH) managed Reveal volumes ahead of Medicare reimbursement to manage cash burden, indicating potential limitations in meeting market demand.
- The company faces challenges in expanding commercial payer coverage for its Guardant 360 test, as not all national payers cover every test run.
- There is uncertainty regarding the timing of ADLT status designation for Shield, which affects the ASP guidance.
- The company anticipates a back-end loaded volume growth for Shield in 2025 due to the time required to ramp up the productivity of newly hired sales reps.
- Guardant Health Inc (GH) is still in early conversations with commercial payers for Shield, indicating potential delays in broader market adoption outside of Medicare.
