Diagnostic Tests Maker Veracyte's Q2 Is 'All-Around Very Good Quarter': Analysts Maintain Bullish View

On Tuesday, Veracyte, Inc VCYT reported second-quarter sales of $114.43 million, up 27% year over year, beating the consensus of $100.3 million.

Testing revenue was $107.0 million, an increase of 31%, driven by the strong performance of our Decipher Prostate and Afirma tests.

Total test volume grew to 39,023, an increase of 23% compared to the second quarter of 2023.

During the quarter, the company achieved a record Decipher Prostate test volume of close to 19,900 tests, driven by recently updated NCCN prostate cancer guidelines, in which the Decipher Prostate test received the highest-level rating among gene expression tests.

The company delivered a record Afirma test volume of approximately 15,700 and received Medicare coverage for Afirma testing of patients with thyroid nodules classified as “Bethesda V,” giving more patients annually access to the test.

The diagnostics company reported adjusted EPS of $0.30, up from $0.12 a year ago, beating the consensus loss of $(0.02).

Guidance: Veracyte raised its full-year 2024 revenue guidance to $432 million-$438 million, up from $402 million-$410 million and above the consensus of $406.27 million.

The guidance represents year-over-year growth of 20%-21% and testing revenue growth of approximately 25%, compared to prior guidance of 11%-14% and testing growth of 15%-18%.

The company now expects cash, cash equivalents, and short-term investments at the end of the year to be $260 million to $270 million compared to prior guidance of $236 million to $240 million.

William Blair writes, “This was an all-around very good quarter for Veracyte, and there simply is not all that much to pick at.

“Management extended its long string of quarterly beats, and the increased guidance for revenue and cash generation should highlight the company as a profitable grower in a group where few names like this exist,” the analyst added.

The analyst maintains an Outperform rating, noting the numbers going higher, and with confidence in the team’s ability to execute on several growth drivers over the near and long term.

Needham maintains Veracyte with a Buy and raises the price target from $27 to $31.

Price Action: VCYT stock is up 24.60% at $27.19 at the last check on Wednesday.

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