CareDx Inc (CDNA) can make a big difference with a little luck

CareDx Inc (NASDAQ: CDNA) stock fell -0.82% on Friday to $24.30 against a previous-day closing price of $24.50. With 1.12 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.9 million shares. During the session, the Diagnostics & Research company that operates in wider Healthcare sector, reached to the highest price of $24.98 whereas the lowest price it dropped to was $23.96. The 52-week range on CDNA shows that it touched its highest point at $84.94 and its lowest point at $19.34 during that stretch. It currently has a 1-year price target of $58.29. Beta for the stock currently stands at 0.90.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CDNA was down-trending over the past week, with a drop of -0.25%, but this was down by -2.84% over a month. Three-month performance dropped to -28.68% while six-month performance fell -41.19%. The stock lost -70.38% in the past year, while it has lost -46.57% so far this year. A look at the trailing 12-month EPS for CDNA yields -0.94 with Next year EPS estimates of -0.01. For the next quarter, that number is -0.11. This implies an EPS growth rate of -45.80% for this year and 115.00% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 24.50%.

Float and Shares Shorts:

At present, 53.02 million CDNA shares are outstanding with a float of 52.19 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.29 million, which was 8.06% higher than short shares on Jun 14, 2022. In addition to Dr. Reginald Seeto as the firm’s Pres, CEO & Director, Ms. Sasha King M.B.A. serves as its Chief Marketing Officer & Franchise Head of Kidney Transplant.

Institutional Ownership:

Through their ownership of 104.39% of CDNA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 64.59% of CDNA, in contrast to 43.28% held by mutual funds. Shares owned by individuals account for 14.11%. As the largest shareholder in CDNA with 8.47% of the stake, The Vanguard Group, Inc. holds 4,510,146 shares worth 4,510,146. A second-largest stockholder of CDNA, ARK Investment Management LLC, holds 3,995,450 shares, controlling over 7.51% of the firm’s shares. Fred Alger Management LLC is the third largest shareholder in CDNA, holding 3,494,482 shares or 6.57% stake. With a 7.84% stake in CDNA, the ARK Genomic Revolution ETF is the largest stakeholder. A total of 4,171,055 shares are owned by the mutual fund manager. The SPDR S&P Biotech ETF, which owns about 5.98% of CDNA stock, is the second-largest Mutual Fund holder. It holds 3,180,794 shares valued at 68.32 million. Alger Funds – Small Cap Focus Fun holds 4.45% of the stake in CDNA, owning 2,366,561 shares worth 50.83 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, CDNA reported revenue of $79.42M and operating income of -$19.05M. Over the past year, revenue came in at $308.41M while operating income stood at -$47.92M. It generated -$19.65M net income for the quarter, which came to -$49.62M over the last twelve months. The EBITDA in the recently reported quarter was -$15.55M and diluted EPS was -$0.37. EBITDA for the full year was -$35.23M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CDNA since 7 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CDNA analysts setting a high price target of $63.00 and a low target of $42.00, the average target price over the next 12 months is $49.67. Based on these targets, CDNA could surge 159.26% to reach the target high and rise by 72.84% to reach the target low. Reaching the average price target will result in a growth of 104.4% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CDNA will report FY 2022 earnings on 02/23/2023. Analysts have provided yearly estimates in a range of -$1.22 being high and -$1.38 being low. For CDNA, this leads to a yearly average estimate of -$1.33. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. CareDx Inc reported -$0.41 EPS against a consensus estimate of -$0.41. The surprise factor in the prior quarter was -$0.10. Based on analyst estimates, the high estimate for the next quarter is -$0.30 and the low estimate is -$0.38. The average estimate for the next quarter is thus -$0.34.

Summary of Insider Activity:

Insiders traded CDNA stock several times over the past three months with 19 Buys and 2 Sells. In these transactions, 67,498 shares were bought while 9,502 shares were sold. The number of buy transactions has increased to 64 while that of sell transactions has risen to 56 over the past year. The total number of shares bought during that period was 284,596 while 175,422 shares were sold.

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