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CareDx, Inc. (CDNA) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of CareDx (CDNA - Free Report) ? Shares have been on the move with the stock up 73.7% over the past month. The stock hit a new 52-week high of $27.47 in the previous session. CareDx has gained 128.3% since the start of the year compared to the 6.6% move for the Zacks Medical sector and the 4.1% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 31, 2024, CareDx reported EPS of $0.25 versus consensus estimate of $-0.13 while it beat the consensus revenue estimate by 37.32%.
For the current fiscal year, CareDx is expected to post earnings of $0.06 per share on $324.46 million in revenues. This represents a 109.38% change in EPS on a 15.74% change in revenues. For the next fiscal year, the company is expected to earn $0.25 per share on $340.05 million in revenues. This represents a year-over-year change of 316.66% and 4.8%, respectively.
Valuation Metrics
CareDx may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CareDx has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 432.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 12.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CareDx currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CareDx fits the bill. Thus, it seems as though CareDx shares could still be poised for more gains ahead.
How Does CDNA Stack Up to the Competition?
Shares of CDNA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sotera Health Company (SHC - Free Report) . SHC has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Sotera Health Company beat our consensus estimate by 11.76%, and for the current fiscal year, SHC is expected to post earnings of $0.72 per share on revenue of $1.11 billion.
Shares of Sotera Health Company have gained 20.3% over the past month, and currently trade at a forward P/E of 20.47X and a P/CF of 11.15X.
The Medical Services industry may rank in the bottom 59% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CDNA and SHC, even beyond their own solid fundamental situation.
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CareDx, Inc. (CDNA) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of CareDx (CDNA - Free Report) ? Shares have been on the move with the stock up 73.7% over the past month. The stock hit a new 52-week high of $27.47 in the previous session. CareDx has gained 128.3% since the start of the year compared to the 6.6% move for the Zacks Medical sector and the 4.1% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 31, 2024, CareDx reported EPS of $0.25 versus consensus estimate of $-0.13 while it beat the consensus revenue estimate by 37.32%.
For the current fiscal year, CareDx is expected to post earnings of $0.06 per share on $324.46 million in revenues. This represents a 109.38% change in EPS on a 15.74% change in revenues. For the next fiscal year, the company is expected to earn $0.25 per share on $340.05 million in revenues. This represents a year-over-year change of 316.66% and 4.8%, respectively.
Valuation Metrics
CareDx may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CareDx has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 432.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 12.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CareDx currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CareDx fits the bill. Thus, it seems as though CareDx shares could still be poised for more gains ahead.
How Does CDNA Stack Up to the Competition?
Shares of CDNA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sotera Health Company (SHC - Free Report) . SHC has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Sotera Health Company beat our consensus estimate by 11.76%, and for the current fiscal year, SHC is expected to post earnings of $0.72 per share on revenue of $1.11 billion.
Shares of Sotera Health Company have gained 20.3% over the past month, and currently trade at a forward P/E of 20.47X and a P/CF of 11.15X.
The Medical Services industry may rank in the bottom 59% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CDNA and SHC, even beyond their own solid fundamental situation.