A significant driver of top-line growth: CareDx Inc (CDNA)

CareDx Inc (NASDAQ: CDNA) stock jumped 5.02% on Monday to $15.05 against a previous-day closing price of $14.33. With 0.92 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.05 million shares. During the session, the Diagnostics & Research company that operates in wider Healthcare sector, reached to the highest price of $15.14 whereas the lowest price it dropped to was $14.26. The 52-week range on CDNA shows that it touched its highest point at $46.88 and its lowest point at $10.50 during that stretch. It currently has a 1-year price target of $28.33. Beta for the stock currently stands at 1.00.

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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 up-trending over the past week, with a rise of 5.69%, but this was up by 29.63% over a month. Three-month performance dropped to -9.06% while six-month performance fell -35.07%. The stock lost -60.32% in the past year, while it has gained 31.90% so far this year. A look at the trailing 12-month EPS for CDNA yields -1.40 with Next year EPS estimates of -0.15. For the next quarter, that number is -0.08. This implies an EPS growth rate of -45.80% for this year and 63.40% 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, 53.49 million CDNA shares are outstanding with a float of 52.24 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.69 million, which was 8.78% higher than short shares on Sep 14, 2022. In addition to Dr. Reginald Seeto as the firm’s Pres, CEO & Director, Dr. Peter Maag Ph.D. serves as its Exec. Director.


Institutional Ownership:

Through their ownership of 108.03% of CDNA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 66.25% of CDNA, in contrast to 38.86% held by mutual funds. Shares owned by individuals account for 14.41%. As the largest shareholder in CDNA with 10.81% of the stake, ARK Investment Management LLC holds 5,787,120 shares worth 5,787,120. A second-largest stockholder of CDNA, SSgA Funds Management, Inc., holds 5,747,244 shares, controlling over 10.74% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in CDNA, holding 4,932,928 shares or 9.21% stake. With a 11.56% stake in CDNA, the ARK Genomic Revolution ETF is the largest stakeholder. A total of 6,187,130 shares are owned by the mutual fund manager. The SPDR S&P Biotech ETF, which owns about 8.90% of CDNA stock, is the second-largest Mutual Fund holder. It holds 4,763,232 shares valued at 54.35 million. Nikko AM Global Umbrella Fund – A holds 3.11% of the stake in CDNA, owning 1,664,436 shares worth 18.99 million.

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 $40.00 and a low target of $19.00, the average target price over the next 12 months is $28.33. Based on these targets, CDNA could surge 165.78% to reach the target high and rise by 26.25% to reach the target low. Reaching the average price target will result in a growth of 88.24% 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 02/23/2024. Analysts have provided yearly estimates in a range of -$1.39 being high and -$1.49 being low. For CDNA, this leads to a yearly average estimate of -$1.43. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. CareDx Inc surprised analysts by $0.07 when it reported -$0.32 EPS against a consensus estimate of -$0.39. The surprise factor in the prior quarter was -$0.07. Based on analyst estimates, the high estimate for the next quarter is -$0.30 and the low estimate is -$0.39. The average estimate for the next quarter is thus -$0.33.

Summary of Insider Activity:

Insiders traded CDNA stock several times over the past three months with 6 Buys and 2 Sells. In these transactions, 21,791 shares were bought while 9,470 shares were sold. The number of buy transactions has increased to 53 while that of sell transactions has risen to 37 over the past year. The total number of shares bought during that period was 459,970 while 137,891 shares were sold.

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