Guardant Health Q3 Earnings Preview: NasdaqGS:GH Up 11.7% This Week

in EARNINGS/INVESTING IDEAS by

Guardant Health, Inc. (NasdaqGS:GH) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$0.36/share on revenue of $65.985 million. The consensus earnings per share (EPS) of -$0.36/share is based on a poll of 7 analysts and represents a decline in eps of -154.7% over the same quarter last year, when the company reported earnings of -$0.14/share.

The revenue forecast of $65.985 million based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 8.4%. Last year the company reported $60.848 million in revenue for the quarter.

Expected to report EPS of -$0.36/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $65.99 $60.85 8.4%
EPS -$0.36 -$0.14 -154.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 2 quarter.

What are your expectations from Guardant Health, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.36 -$0.57 -58.2% Missed
Q1, 2020 -$0.39 -$0.29 25.2% Beat
Q4, 2019 -$0.30 -$0.27 11.3% Beat
Q3, 2019 -$0.37 -$0.14 62.6% Beat
Q2, 2019 -$0.35 -$0.13 62.8% Beat
Q1, 2019 -$0.37 -$0.30 18.8% Beat
Q4, 2018 -$0.35 -$0.30 14.9% Beat
Q3, 2018 -$0.29 -$0.29 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $85.06 $85.61 0.6% Increase
May 7, 2020 $80.85 $88.15 9.0% Increase
February 24, 2020 $88.81 $75.79 −14.7% Decline
November 7, 2019 $64.65 $71.89 11.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.75, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.75 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Guardant Health, Inc. is currently trading at $111.39/share, down −0.3% for the day. The company is trading at approximately 97.8% of its 52-week high of $114.33/share. The company’s stock price is up 30.1% since the last earnings report and up 11.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 61.54 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −92.29 and a forward P/E multiple of −68.64.

Guardant Health, Inc.’s current share price also implies a price-to-book (P/B) multiple of 9.97. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $111.39
P/E Ratio −92.3x
P/E Ratio (Fwd) −68.6x
Price To Sales 42.7x
Total Debt / Total Capital 0.4%
Levered Free Cash Flow -$97.712 million
EV / EBITDA −83.8x

Finbox

Guardant Health, Inc. is a large-cap stock with a market capitalization of $11.126 billion and a total enterprise value of $10.142 billion. The company operates in the Healthcare sector and the Healthcare Providers & Services industry.

Guardant Health, Inc., a precision oncology company, provides blood tests, data sets, and analytics in the United States and internationally. The company offers liquid biopsy tests for advanced stage cancer, such as Guardant360, a molecular diagnostic test that measures various cancer-related genes; and GuardantOMNI, a broader gene panel, including genes associated with homologous recombination repair deficiency and biomarkers for immuno-oncology applications. It also provides LUNAR-1 for minimal residual disease and recurrence detection in cancer survivors. In addition, the company is developing LUNAR-2 for early detection of cancer in higher risk individuals. Further, it offers development services, including companion diagnostic development and regulatory approval, clinical trial referral, and liquid biopsy testing development and support services to biopharmaceutical companies and medical institutions. The company has collaboration agreement with Radius Health, Inc. to develop liquid biopsy companion diagnostic for elacestrant. Guardant Health, Inc. was incorporated in 2011 and is headquartered in Redwood City, California.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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