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Guardant Health (GH) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Guardant Health, Inc. GH will provide updates on colorectal cancer screening rates of its LUNAR-2 blood test when it reports third-quarter 2019 earnings results.

The company’s earnings track record has been mixed so far, having delivered a positive surprise thrice in the trailing four quarters while lagging the same once, the average miss being 119.06%. In the last reported quarter, Guardant Health came up with a beat of 61.76%.

Notably, in October 2018, Guardant Health went public through an initial public offering and started trading on the Nasdaq under the ticker symbol of GH.

Shares of Guardant Health have soared 87.9% so far this year versus the industry’s decline of 1.5%.

Let’s see, how things are shaping up for this announcement.

Factors to Consider

Guardant Health’s top line mainly comprises revenues generated from its Precision oncology testing and development services. The company’s liquid biopsy-based Guardant360 and GuardantOMNI tests are designed for advanced-stage cancer patients using its LUNAR-1 and LUNAR-2 programs for minimal residual disease/recurrence monitoring and an early detection screening, respectively.

The company reported 11,875 tests to clinical customers and 5,285 tests to biopharmaceutical customers in the second quarter of 2019, reflecting a year-over-year increase of 77% and 112%, respectively. It remains to be seen whether this number also shot up in the third quarter in the upcoming release.

Major Updates on Q3 Earnings Call

Investors will be keen to get an update this earnings season on the company’s investigational LUNAR RUO assay, which is being developed to identify early-stage colorectal cancer patients with post-operative molecular residual disease, who might benefit from an adjuvant therapy.

The company also remains on track to release a CLIA-validated version of the LUNAR assay for prospective clinical studies by this year-end. We expect management to provide the latest details on the same.

Key Developments

Earlier this month, Guardant Health initiated the ECLIPSE study to evaluate the performance of its LUNAR-2 blood test for detecting colorectal cancer in average-risk adult patients. The study, expected to enroll 10,000 patients aged between 45 and 84 years, will improve colorectal cancer screening rates by offering a simpler blood test compared with current testing methods.

If successful, Guardant Health expects data from this study to support a premarket approval (PMA) submission to the FDA.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Guardant Health this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But this is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Guardant Health has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at a loss of 39 cents per share.

Zacks Rank: Guardant Health carries a Zacks Rank #2, which increases the predictive power of ESP. However, the 0.00% ESP makes surprise prediction difficult.

Guardant Health, Inc. Price and EPS Surprise

Guardant Health, Inc. Price and EPS Surprise

Stocks That Warrant a Look

Here are a few healthcare stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around.

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +0.28% and a Zacks Rank of 2. The company is scheduled to release results on Oct 31. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jazz Pharmaceuticals PLC JAZZ has an Earnings ESP of +1.70% and is Zacks #2 Ranked. The company is scheduled to release results on Nov 5.

Portola Pharmaceuticals, Inc. PTLA has an Earnings ESP of +6.33% and a Zacks Rank of 1. The company is scheduled to release results on Nov 5.

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Click to get this free report Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report Jazz Pharmaceuticals PLC (JAZZ) : Free Stock Analysis Report Portola Pharmaceuticals, Inc. (PTLA) : Free Stock Analysis Report Guardant Health, Inc. (GH) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research