Veracyte (VCYT) AI Stock Analysis

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Veracyte

(NASDAQ:VCYT)

70Outperform

Veracyte's overall stock score reflects its strong financial performance and positive earnings outlook, which are offset by high valuation concerns. The company shows a solid growth trajectory and financial stability, with strategic initiatives supporting future prospects. However, technical analysis indicates a lack of clear momentum, and the high P/E ratio suggests cautious optimism.

Positive Factors

Earnings Performance

VCYT's 1Q25 revenue and non-GAAP EPS beat consensus.

Strategic Expansion

The announcement of launching Prosigna as an LDT in the United States by mid-2026 indicates strategic expansion and potential growth.

Negative Factors

Market Concerns

Concern exists that Veracyte has only two meaningful commercial products.

Product Revenue Decline

Product revenue experienced a year-over-year decline of 18%, impacted by ongoing supply chain issues affecting Prosigna nCounter.

Veracyte (VCYT) vs. S&P 500 (SPY)

Market Cap

$2.39B

Dividend YieldN/A

Average Volume (3M)982.13K

Price to Earnings (P/E)99.7

Beta (1Y)1.73

Revenue Growth23.42%

EPS GrowthN/A

CountryUS

Employees824

SectorHealthcare

Sector Strength50

IndustryBiotechnology

Share Statistics

EPS (TTM)0.09

Shares Outstanding78,314,120

10 Day Avg. Volume945,255

30 Day Avg. Volume982,125

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.22

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit9.81

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$40.50

Price Target Upside29.77% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Veracyte Business Overview & Revenue Model

Company DescriptionVeracyte, Inc. is a genomic diagnostics company that leverages advanced genomic technology to improve diagnostic accuracy and outcomes for patients. Operating primarily in the healthcare and biotechnology sectors, the company focuses on developing and commercializing diagnostic tests that aid in the diagnosis of various diseases, particularly in oncology and pulmonology. Veracyte's core products include genomic tests like the Afirma Thyroid FNA Analysis and the Envisia Genomic Classifier, which provide critical genomic insights to guide treatment decisions.

How the Company Makes MoneyVeracyte generates revenue through the sale of its proprietary genomic tests to healthcare providers and institutions. The company's revenue model is primarily based on test volume, with healthcare providers ordering tests for patients who require more precise diagnostic information. Veracyte also partners with pharmaceutical companies and research institutions to provide data and insights derived from its genomic technologies, further contributing to its revenue streams. Additionally, Veracyte may receive reimbursement from insurance companies and government healthcare programs for its diagnostic tests, making these partnerships and reimbursement arrangements significant factors in its earnings.

Veracyte Financial Statement Overview

Summary

Veracyte demonstrates strong financial health with significant revenue growth, improving profitability, and strong cash flow generation. The company effectively manages growth while maintaining financial stability with low leverage.

Income Statement

―

Veracyte has shown significant revenue growth from $361.05 million in 2023 to $445.76 million in TTM, indicating a strong upward trajectory. The gross profit margin is healthy at 65.98%, and the net profit margin has turned positive to 5.42% from negative in previous years, signaling improving profitability. EBIT and EBITDA margins are positive at 3.74% and 9.36%, respectively, marking a notable turnaround from prior losses.

Balance Sheet

The company's balance sheet is robust with a high equity ratio of 90.47% and a low debt-to-equity ratio of 0.04, reflecting financial stability and low leverage risk. Return on equity is modest at 2.05%, but the strong equity base and low debt levels suggest solid financial health.

Cash Flow

―

Veracyte's cash flow is strong with a significant operating cash flow of $75.10 million and a free cash flow of $63.81 million, both showing substantial growth from the previous year. The operating cash flow to net income ratio is robust at 3.11, indicating efficient cash generation relative to net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
445.76M	361.05M	296.54M	219.51M	117.48M
	Gross Profit
298.14M	248.15M	194.95M	145.11M	76.03M
	EBIT
16.14M	-85.80M	-41.08M	-81.90M	-35.39M
	EBITDA
49.20M	-49.41M	-6.98M	-60.18M	-25.77M
	Net Income Common Stockholders
24.14M	-74.40M	-36.56M	-75.56M	-35.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
289.44M	216.45M	178.85M	173.20M	349.36M
	Total Assets
1.30B	1.11B	1.16B	1.19B	457.16M
	Total Debt
50.74M	12.63M	14.72M	18.85M	12.32M
	Net Debt
-188.35M	-203.82M	-139.53M	-154.34M	-337.05M
	Total Liabilities
124.07M	70.80M	81.22M	91.31M	35.93M
	Stockholders Equity
1.18B	1.04B	1.08B	1.10B	421.23M
Cash Flow		Free Cash Flow
63.81M	34.26M	-1.01M	-37.00M	-12.55M
	Operating Cash Flow
75.10M	44.22M	7.54M	-31.62M	-9.71M
	Investing Cash Flow
-56.27M	15.11M	-29.39M	-739.21M	-3.84M
	Financing Cash Flow
4.90M	2.84M	3.49M	596.32M	203.59M

Veracyte Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.21

Price Trends

50DMA

31.25

Negative

100DMA

36.40

Negative

200DMA

35.05

Negative

Market Momentum

MACD

-0.35

Positive

RSI

42.60

Neutral

STOCH

54.16

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VCYT, the sentiment is Negative. The current price of 31.21 is above the 20-day moving average (MA) of 31.16, below the 50-day MA of 31.25, and below the 200-day MA of 35.05, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 42.60 is Neutral, neither overbought nor oversold. The STOCH value of 54.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VCYT.

Veracyte Risk Analysis

Veracyte disclosed 57 risk factors in its most recent earnings report. Veracyte reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Veracyte Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VCYT	70 Outperform	$2.39B	99.71	2.86%	―	23.42%	―
VCEL	70 Outperform	$1.93B	208.29	1.13%	―	14.80%	530.21%
ARDX	56 Neutral	$945.06M	―	-36.26%	―	127.33%	21.31%
Sector *	52 Neutral	$5.17B	3.59	-42.19%	2.82%	15.05%	-0.04%
XENE	48 Neutral	$2.69B	―	-27.85%	―	―	-10.19%
IMVT	45 Neutral	$2.36B	―	-74.17%	―	―	-43.10%
MLTX	41 Neutral	$2.41B	―	-25.24%	―	―	-147.80%

* Healthcare Sector Average

Performance Comparison

VCYT

Veracyte

29.71

8.34

39.03%

VCEL

Vericel

41.73

-6.37

-13.24%

ARDX

Ardelyx

3.62

-4.15

-53.41%

XENE

Xenon

35.02

-5.52

-13.62%

IMVT

Immunovant

14.02

-15.37

-52.30%

MLTX

MoonLake Immunotherapeutics

38.47

-2.45

-5.99%

Veracyte Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 1.20%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call indicates a strong performance with significant revenue growth, particularly in the Decipher and Afirma tests, and positive developments in upcoming product launches. However, challenges with the SAS subsidiary and some revenue impacts due to prior period collections and tariffs present potential hurdles.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Veracyte reported Q1 2025 revenue of $114.5 million, an 18% year-over-year increase, driven by testing revenue growth of 19%.

Decipher's Impressive Performance

Decipher volume grew 37% year-over-year with revenue growth of 33%. The test is now expanding into the metastatic prostate cancer market.

Afirma Volume Growth

Afirma saw a 10% increase in test volume year-over-year, indicating strong demand and market penetration.

Positive Adjusted EBITDA Margin

The company achieved an adjusted EBITDA margin of 21.6%, exceeding expectations.

Advancement in New Product Launches

Veracyte is set to launch Prosigna as an LDT for the U.S. breast cancer market and progressing with its MRD platform for muscle invasive bladder cancer, aiming for a 2026 launch.

Negative Updates

Challenges with SAS Subsidiary

Veracyte's French subsidiary, SAS, filed for bankruptcy, impacting IVD product development timelines.

Afirma Revenue Impacted by Prior Period Collections

Afirma's revenue growth was lower than volume growth due to prior period collection benefits in 2024 and issues with lab benefit managers' policies.

Uncertainty in Tariff Impacts

Potential tariff impacts on the supply chain could affect costs, though measures are in place to mitigate this.

Company Guidance

In the recent Q1 2025 financial results call, Veracyte provided guidance that highlighted several key metrics and strategic initiatives. The company reported total revenue of $114.5 million, marking an 18% year-over-year increase. Testing revenue grew 19% year-over-year, with double-digit volume growth in their Decipher and Afirma tests, at 37% and 10%, respectively. The adjusted EBITDA margin was 21.6%, surpassing expectations, and the company ended the quarter with $287 million in cash and short-term investments. For 2025, Veracyte reiterated its testing revenue guidance of $470-480 million and raised its adjusted EBITDA margin guidance to 22.5% from 21.6%. The company is focused on expanding its testing portfolio, including the launch of Decipher Prostate for metastatic populations and a new Prosigna LDT for the U.S. breast cancer market. They also emphasized progress in their MRD platform, targeting a commercial launch in the first half of 2026, and highlighted their commitment to international expansion despite operational changes in their French subsidiary.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.