Michael Matson, an analyst from Needham, reiterated the Buy rating on Veracyte (VCYT – Research Report). The associated price target was lowered to $27.00.
Michael Matson has given his Buy rating due to a combination of factors, including Veracyte’s strong performance in the first quarter of 2024 and the company’s progress towards profitability. Veracyte outperformed consensus estimates for revenue and earnings per share (EPS) during this period, and management confidently increased its revenue guidance for the rest of the year. Although revenue growth has decelerated compared to the previous quarter, this was largely due to a robust increase in Testing revenue, which helped offset the declines in Biopharma and Other revenue streams, as well as Product revenue.
The company’s non-GAAP gross margin experienced a slight decrease year-over-year, but more notably, Veracyte’s non-GAAP operating margin improved significantly, indicating efficient management and a clear path toward profitability. Matson acknowledges these positive trends by maintaining a Buy rating for VCYT, despite adjusting the price target to reflect the current market multiples of peer companies. This adjustment suggests a careful consideration of market conditions while still recognizing Veracyte’s strong fundamentals and growth prospects.
Matson covers the Healthcare sector, focusing on stocks such as Atricure, Artivion, and Masimo. According to TipRanks, Matson has an average return of -4.3% and a 45.24% success rate on recommended stocks.
In another report released today, Scotiabank also maintained a Buy rating on the stock with a $37.00 price target.
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Veracyte (VCYT) Company Description:
Veracyte, Inc. engages in the research, development and commercialization of diagnostic products. The firm’s portfolio includes Afirma, Percepta, and Envisia. It intends to treat thyroid cancer, improve lung cancer screening, and clarify the diagnosis of idiopathic pulmonary fibrosis. The company was founded by Bonnie H. Anderson and Y. Douglas Dolginow on August 15, 2006 and is headquartered in South San Francisco, CA.
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