CareDx, Inc. Just Beat EPS By 775%: Here's What Analysts Think Will Happen Next
CareDx, Inc. (NASDAQ:CDNA) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 14% higher than the analysts had forecast, at US$139m, while EPS were US$0.35 beating analyst models by 775%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, CareDx's seven analysts are now forecasting revenues of US$564.0m in 2027. This would be a solid 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 81% to US$0.46 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$526.0m and earnings per share (EPS) of US$0.39 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.
Check out our latest analysis for CareDx
With these upgrades, we're not surprised to see that the analysts have lifted their price target 34% to US$86.17per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CareDx at US$100.00 per share, while the most bearish prices it at US$46.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting CareDx's growth to accelerate, with the forecast 11% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 21% annually. So it's clear that despite the acceleration in growth, CareDx is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CareDx following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CareDx going out to 2028, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for CareDx (2 are a bit unpleasant!) that you should be aware of.
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