CareDx Soars 15% As 3Q Revenue Outlook Surpasses Estimates

Shares of CareDx soared 15.2% on Thursday after the company reported preliminary 3Q revenues that exceeded Wall Street’s estimates and marked significant year-over-year improvement.

The precision-medicine company expects 3Q sales to be approximately $53 million, which is way higher than analysts’ expectations of $44.7 million. Preliminary 3Q sales projection reflects year-over-year growth of 57%.

CareDx’s (CDNA) 3Q revenue from the Testing segment is anticipated to increase by 60.3% to $45.2 million year-on-year. Sales from Product and Digital & Other divisions are expected to come in at $5.4 million and $2.4 million, respectively, reflecting a growth of 28.6% and 71.4%.

CareDx CEO Peter Maag said, “Our strong third quarter performance was driven by this dedication and our commitment to lead in advancing transplantation, underscored by our surveillance solutions, AlloSure and AlloMap.” (See CDNA stock analysis on TipRanks)

Following its 3Q preliminary sales results, H.C. Wainwright analyst Yi Chen raised the stock’s price target to $47 (7% downside potential) from $45. In a note to investors on October 8, Chen wrote, “We believe this robust growth was primarily a result of relatively lower transplant related activities in 2Q20 due to COVID-19. As transplant centers’ activities return to pre- COVID levels, we expect testing revenue to continue to grow in the current quarter.”

Currently, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus. With shares up a whopping 134% year-to-date, the average price target of $57.50 implies a further upside potential of about 13.8% to current levels.