Shares of Guardant Health (NASDAQ: GH), a leading provider of liquid biopsies that are used to detect cancer, jumped 12% as of 10:05 a.m. EDT on Wednesday. The double-digit move is a response to the release of expectation-topping fourth-quarter results and upbeat guidance.
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Here's a look at the headline numbers from the fourth quarter:
- Revenue jumped 64% to $32.9 million. That easily surpassed the $24.6 million that Wall Street had expected.
- Gross margin expanded by 330 basis points to 57.6%.
- Net loss was $25.1 million, or $0.30 per share. This figure was lower than the $0.36 per share net loss that analysts were modeling.
- Cash balance at year-end was $496.5 million.
Zooming out to the full year, here's how the company performed in 2018:
- Revenue grew 82% to $90.6 million. This figure blasted past management's guidance range of $82 million to $84 million.
- Gross margin soared from 36.6% in 2017 to 52.3% in 2018.
- Net loss declined by 4% to $85.1 million, or $2.80 per share
Management expects that the company's strong growth will continue into 2019:
- Revenue is expected to land between $130 million and $135 million. This would mark growth of 43% to 49% and is far higher than the $117 million that Wall Street was expecting.
- Net loss is expected to widen to a range of $126 million to $129 million. That's a sizable jump from the $85.1 million net loss in 2018.
The blowout quarterly results and bullish guidance are prompting traders to bid up this red-hot stock once again.
Guardant recently announced encouraging results from its Nile study. This trial was designed to compare the accuracy of its Guardant360 liquid biopsy product with current standard-of-care tissue-based testing methods in detecting biomarkers in patients with non-small-cell lung cancer. The results showed that Guardant360 was just as effective at detecting genomic biomarkers as tissue-based testing. That's big news since the Guardant360 test is faster, cheaper, and far more patient-friendly than current testing methods.
Guardant Health has already been a home run for early investors, and for good reason. Revenue and margins are on the rise and the company is an early leader in a market poised for massive growth.
Overall, there are plenty of reasons for investors to believe that this company's growth engine is just getting warmed up.
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