Maintaining Hold on CareDx Amid Growth, Valuation, and Uncertainty Concerns

BTIG analyst Mark Massaro has reiterated their neutral stance on CDNA stock, giving a Hold rating on May 13.

Mark Massaro has given his Hold rating due to a combination of factors surrounding CareDx’s recent performance and future outlook. CareDx has shown some positive signs, with a third consecutive quarter of sequential volume growth and a solid financial performance in Q1, surpassing both Massaro’s and the Street’s expectations. Despite this, there is still uncertainty regarding the sustainability of operational improvements and growth. The company’s valuation relative to its peers is slightly higher, trading at 2.0x consensus 2025 revenue estimates compared to peers at 1.7x, suggesting the stock price may already reflect the recent positive developments.
Furthermore, while the company has raised its revenue guidance for 2024, the assumptions behind this forecast are conservative, including no changes to Medicare reimbursement and commercial payor coverage, as well as no further prior period collections. Massaro also notes the potential for a positive impact from the Increasing Organ Transplant Access Model (IOTA Model) proposed by CMS, but cautions that its benefits are not yet guaranteed. On the litigation front with Natera, the ongoing legal battle adds another layer of uncertainty, with the final damages settlement potentially taking additional time to resolve. Given the mix of these factors, Massaro maintains a neutral stance on CareDx’s stock.

CDNA’s price has also changed dramatically for the past six months – from $8.890 to $15.240, which is a 71.43% increase.

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CareDx (CDNA) Company Description:

CareDx, Inc. operates as a transplant diagnostics company,which discovers, develops, and commercializes diagnostic solutions. Its product includes AlloMap, AlloSure, and Laboratory products. The company was founded on December 21, 1998 and is headquartered in Brisbane, CA.