Guardant Health stock jumped Thursday on an "impressive" third-quarter report following the launch of its cancer detection test, Shield.
Shield is the first blood test to win Food and Drug Administration approval to detect colon cancer. It rivals a stool-based test called Cologuard from Exact Sciences.
During the third quarter, Guardant put up $191.5 million in sales, up 34% year over year. That easily beat expectations for $170.4 million, Canaccord Genuity analyst Kyle Mikson said in a report. Precision oncology sales rocketed more than 35%, while development services rose 34%.
The company also hiked its sales outlook for the year and now expects $720 million to $725, up nearly 4% at the midpoint from Guardant's previous guidance.
Guardant Health stock gained 13.1%, closing at 28.59. That followed light sales and a guidance cut from rival Exact Sciences on Wednesday. Exact Sciences stock responded by dropping 23.5%.
Guardant Health Stock: Narrow Losses
In addition to the strong sales report, Guardant Health's third-quarter loss was narrower than expected at 45 cents per share, vs. analysts' call for 58 cents, according to FactSet.
Early volume for Shield looked positive, Canaccord's Mikson said. Importantly, the company received a $920 Medicare reimbursement rate for Shield. Reimbursement will help drive more test orders.
Mikson kept his buy rating on Guardant Health stock.
William Blair analyst Andrew Brackmann notes the precision oncology business is carrying the entire valuation for Guardant Health stock. This includes the company's Guardant 360, a blood test that looks at the genetic factors behind a patient's cancer.
20% Growth In 2025
Next year, Guardant expects 20% growth in clinical test volume, thanks to Shield and an inflection point for Guardant Reveal, Canaccord's Mikson said. Guardant Reveal tests for signs of minimum residual disease following treatment for colon cancer.
It's early innings for Shield, Brackmann said in a client note.
"We still believe it will take some time for investor sentiment to shed concerns over Shield spend as it remains very early innings for a version of the test that most investors believe will face commercial challenges," he said.
To that point, Guardant is also working on a second version of Shield to test for colon and other forms of cancer.
But Brackmann reiterated his outperform rating on Guardant Health stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
