Guardant Health is Monday's pick for IBD 50 Growth Stocks To Watch as the medical services name is pulling back, after recently flirting with a buy point of a base. The cancer diagnostics name is possibly getting weighed down by the sharp plunge by Hims & Hers Health Monday.
Hims & Hers tumbled more than 30% on news Novo Nordisk ended its short-lived collaboration with the telehealth platform over concerns about the company's sales of cheaper knockoffs of the weight-loss drug Wegovy. Both are in the Medical Services group, which ranks No. 25 out of the 197 groups Investor's Business Daily tracks.
IBD 50 new addition name Guardant develops blood tests for cancer detection. Its biomarkers help in personalized therapy selection and help medical professionals assess response to treatments.
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Medical Services Stock Near A Buy Point
The medical services stock is back below the 50.54 buy point of an early-stage cup-with-handle base after testing it Wednesday and Friday, according to MarketSurge pattern recognition. Shares have been finding resistance around the 50 price level.
Guardant Health stock dropped to start the session Monday, but trimmed losses to around 1.6% late morning in light volume. The biotech name sank to nearly 7% below the buy point before improving Monday.
Shares are holding support at their 21-day exponential moving average.
The medical services stock has climbed around 59% so far this year, to around 48, earning it a 95 IBD Earnings Per Share Rating. The stock is around 8% off its 52-week high, but still has a long way to go back to its all-time high of 181.07, reached Feb. 12, 2021.
Guardant Health Shows Steady Sales Grow
The medical services provider is not yet profitable, but its sales continue to grow. It reported a smaller-than-expected first-quarter loss and topped revenue estimates April 30.
The revenue increase was mainly driven by robust performance in its oncology, screening, biopharma and data businesses. Guardant Health raised its 2025 sales guidance to a range of $880 million to $890 million, exceeding views.
Its 21% sales growth in the first quarter eased from 34% and 30% over the last two quarters, and lagged its 26% average in the previous eight quarters. Its first-quarter gross margin increased to 63% from 61% in the prior year.
Analysts' revenue estimates call for an average boost of around 19% over the next four quarters. Projections see continued losses for 2025 and 2026.
Management owns 6% of shares while mutual funds own a hefty 75% of Guardant Health. Its IBD Accumulation/Distribution Rating of B+ indicates fairly heavy institutional buying over the last 13 weeks.
A handful of names on the IBD Mutual Fund Index own shares of Guardant Health, including Lord Abbett Developing Growth Fund.
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