Veracyte (VCYT) AI Stock Analysis

• Market Cap: $2.57B
• Dividend Yield: N/A
• Average Volume (3M): 1.00M
• Price to Earnings (P/E): 98.6
• Beta (1Y): 1.56
• Revenue Growth: 19.91%
• EPS Growth: N/A
• Country: US
• Employees: 824
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.44
• Shares Outstanding: 78,671,585
• 10 Day Avg. Volume: 968,486
• 30 Day Avg. Volume: 1,001,517
• PEG Ratio: -0.96
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 6.79
• P/FCF Ratio: 47.47
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 3.86
• Enterprise Value/Gross Profit: 5.73
• Enterprise Value/Ebitda: 31.47
• 1Y Price Target: $37.75
• Price Target Upside: 12.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: $33.00 ▼(-1.32% Downside)

Veracyte's overall stock score reflects strong earnings call performance and improving financial health, offset by technical indicators suggesting potential overbought conditions and high valuation concerns. The company's robust revenue growth and strategic product launches are significant strengths, while cash flow management and valuation present notable risks.

Positive Factors

Revenue Growth

Sustained revenue growth indicates strong market demand and effective sales strategies, enhancing long-term financial stability.

Product Innovation

Innovative products like Decipher enhance Veracyte's competitive edge and expand its market presence in genomic diagnostics.

Market Position

Dominant market share in key segments strengthens Veracyte's competitive position and supports sustained revenue growth.

Negative Factors

Cash Flow Management

Declining free cash flow may limit Veracyte's ability to invest in growth opportunities and manage financial obligations effectively.

Product Revenue Decline

A decline in product revenue may indicate challenges in product demand or competition, potentially impacting future profitability.

Margin Pressure

Expected margin decline could affect profitability, necessitating cost management and efficiency improvements to sustain earnings.

Veracyte Business Overview & Revenue Model

Company Description

Veracyte, Inc. is a genomic diagnostics company that focuses on improving patient outcomes through the development and commercialization of diagnostic tests for patients with cancer and other diseases. The company operates primarily in the healthcare sector, offering innovative solutions that enhance the accuracy of diagnoses and help physicians make informed treatment decisions. Veracyte's core products include its proprietary genomic tests, such as the Afirma Genomic Sequencing Classifier for thyroid cancer and the Percepta Genomic Sequencing Classifier for lung cancer, which are designed to reduce unnecessary surgeries and improve patient management.

How the Company Makes Money

Veracyte generates revenue primarily through the sale of its genomic diagnostic tests to hospitals, laboratories, and healthcare providers. The company charges fees for each test processed, which can vary depending on the specific test and the clinical context. Key revenue streams include test volume growth, reimbursement from insurance companies for the tests performed, and direct sales to healthcare organizations. Additionally, Veracyte has established partnerships with various healthcare institutions and payers to facilitate access to its tests and ensure reimbursement, which significantly contributes to its earnings. The company may also engage in research collaborations and licensing agreements that can provide additional revenue opportunities.

Veracyte Financial Statement Overview

Summary

Veracyte's financial health is improving with strong revenue growth and a return to profitability. The balance sheet is robust with low leverage, supporting financial stability. However, cash flow management needs attention due to declining free cash flow.

Income Statement

Veracyte has shown consistent revenue growth with a TTM growth rate of 3.4%, following a strong annual growth of 23.5% in 2024. The company has improved its profitability, achieving a positive net profit margin of 5.5% in TTM, up from a negative margin in previous years. Gross profit margin remains robust at 67.3% TTM. However, EBIT and EBITDA margins, while positive, are relatively low, indicating room for operational efficiency improvements.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.041 TTM, indicating minimal leverage and financial risk. The return on equity has improved to 2.2% TTM, reflecting better profitability. The equity ratio is stable, suggesting a solid capital structure. Overall, the company maintains a healthy financial position with low debt levels.

Cash Flow

Cash flow performance shows some challenges, with a decline in free cash flow growth by 29.7% TTM. The operating cash flow to net income ratio is strong at 0.85, indicating good cash generation relative to net income. However, the decrease in free cash flow suggests potential issues in cash management or increased capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	479.13M	445.76M	361.05M	296.54M	219.51M	117.48M
Gross Profit	322.51M	289.55M	248.15M	194.95M	145.11M	76.03M
EBITDA	58.75M	49.20M	-49.41M	-6.98M	-60.18M	-25.77M
Net Income	26.34M	24.14M	-74.40M	-36.56M	-75.56M	-35.85M
Balance Sheet
Total Assets	1.34B	1.30B	1.11B	1.16B	1.19B	457.16M
Cash, Cash Equivalents and Short-Term Investments	320.72M	289.44M	216.45M	178.85M	173.20M	349.36M
Total Debt	50.65M	50.74M	12.63M	14.72M	18.85M	12.32M
Total Liabilities	123.05M	124.07M	70.80M	81.22M	91.31M	35.93M
Stockholders Equity	1.22B	1.18B	1.04B	1.08B	1.10B	421.23M
Cash Flow
Free Cash Flow	55.19M	63.81M	34.26M	-1.01M	-37.00M	-12.55M
Operating Cash Flow	65.21M	75.10M	44.22M	7.54M	-31.62M	-9.71M
Investing Cash Flow	-108.42M	-56.27M	15.11M	-29.39M	-739.21M	-3.84M
Financing Cash Flow	-7.19M	4.90M	2.84M	3.49M	596.32M	203.59M

Veracyte Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VCYT, the sentiment is Positive. The current price of 33.44 is above the 20-day moving average (MA) of 32.17, above the 50-day MA of 29.00, and above the 200-day MA of 32.58, indicating a bullish trend. The MACD of 1.15 indicates Positive momentum. The RSI at 60.50 is Neutral, neither overbought nor oversold. The STOCH value of 50.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VCYT.

Veracyte Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VCYT	70 Outperform	$2.57B	98.65	2.24%	―	19.91%	―
ARQT	58 Neutral	2.11B	-23.60	-67.11%	―	99.50%	65.91%
TVTX	49 Neutral	2.26B	-12.40	-516.25%	―	87.94%	57.84%
IMVT	45 Neutral	2.83B	-5.70	―	―	―	-48.38%
CELC	44 Neutral	2.15B	-14.68	―	―	―	-25.61%
IRON	43 Neutral	2.28B	-14.65	―	―	―	-22.19%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Veracyte Corporate Events

Veracyte Stockholders Approve Key Decisions at Annual Meeting

Veracyte‘s stockholders convened for their Annual Meeting, where they elected seven directors to serve until the 2026 annual meeting. Additionally, they ratified Ernst & Young LLP as the independent registered public accounting firm for 2025 and approved the compensation of the company’s named executive officers on a non-binding advisory basis. Stockholders also decided that future advisory votes on executive compensation will occur annually, aligning with the company’s recommendation. Furthermore, the 2023 Plan Amendment received approval.