Taking on analysts’ expectations and winning: Guardant Health Inc. (GH)

Guardant Health Inc. (NASDAQ: GH) stock jumped 0.09% on Friday to $31.70 against a previous-day closing price of $31.67. With 1.86 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.59 million shares. During the session, the Diagnostics & Research company that operates in wider Healthcare sector, reached to the highest price of $32.23 whereas the lowest price it dropped to was $29.45. The 52-week range on GH shows that it touched its highest point at $78.34 and its lowest point at $24.63 during that stretch. It currently has a 1-year price target of $66.81. Beta for the stock currently stands at 0.84.

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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 GH was up-trending over the past week, with a rise of 3.39%, but this was up by 4.86% over a month. Three-month performance dropped to -27.63% while six-month performance fell -37.52%. The stock lost -55.97% in the past year, while it has gained 16.54% so far this year. A look at the trailing 12-month EPS for GH yields -5.94 with Next year EPS estimates of -5.18. For the next quarter, that number is -1.42. This implies an EPS growth rate of -53.80% for this year and 16.30% for next year.

Float and Shares Shorts:

At present, 102.29 million GH shares are outstanding with a float of 97.63 million shares on hand for trading. On Oct 13, 2022, short shares totaled 3.92 million, which was 3.83% higher than short shares on Sep 14, 2022. In addition to Dr. Helmy Eltoukhy Ph.D. as the firm’s Co-Founder, Co-CEO & Chairman, Dr. AmirAli Talasaz Ph.D. serves as its Co-CEO & Director.


Institutional Ownership:

Through their ownership of 93.62% of GH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 59.59% of GH, in contrast to 35.32% held by mutual funds. Shares owned by individuals account for 31.57%. As the largest shareholder in GH with 12.69% of the stake, Fidelity Management & Research Co holds 12,994,092 shares worth 12,994,092. A second-largest stockholder of GH, The Vanguard Group, Inc., holds 8,781,305 shares, controlling over 8.57% of the firm’s shares. Capital Research & Management Co is the third largest shareholder in GH, holding 6,153,909 shares or 6.01% stake. With a 3.63% stake in GH, the American Funds Growth Fund of Ame is the largest stakeholder. A total of 3,715,865 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.88% of GH stock, is the second-largest Mutual Fund holder. It holds 2,945,329 shares valued at 80.11 million. Vanguard Small Cap Index Fund holds 2.45% of the stake in GH, owning 2,507,397 shares worth 68.2 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GH since 20 analysts follow the stock currently. There are 17 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 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 GH analysts setting a high price target of $90.00 and a low target of $36.00, the average target price over the next 12 months is $66.81. Based on these targets, GH could surge 183.91% to reach the target high and rise by 13.56% to reach the target low. Reaching the average price target will result in a growth of 110.76% 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. GH will report FY 2022 earnings on 02/22/2024. Analysts have provided yearly estimates in a range of -$4.10 being high and -$6.66 being low. For GH, this leads to a yearly average estimate of -$6.32. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Guardant Health Inc. surprised analysts by -$0.30 when it reported -$1.58 EPS against a consensus estimate of -$1.28. The surprise factor in the prior quarter was -$1.04. Based on analyst estimates, the high estimate for the next quarter is -$1.02 and the low estimate is -$1.60. The average estimate for the next quarter is thus -$1.39.

Summary of Insider Activity:

Insiders traded GH stock several times over the past three months with 7 Buys and 4 Sells. In these transactions, 1,401 shares were bought while 3,624 shares were sold. The number of buy transactions has increased to 28 while that of sell transactions has risen to 20 over the past year. The total number of shares bought during that period was 50,183 while 35,164 shares were sold.

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