Guardant Health Stock To $65?

Guardant Health (GH) stock has jumped 28% during the past day, and is currently trading at $92.41. Our multi-factor assessment suggests that it may be time to reduce exposure to GH stock. We are primarily concerned current valuation and a price of $65 may not be out of reach. We believe there are only a couple of things to fear in GH stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $12 Bil in market cap, Guardant Health provides precision oncology liquid biopsy tests, data, and analytics for advanced and early-stage cancer detection and treatment selection internationally.

[1] Valuation Looks Very High

This table highlights how GH is valued vs broader market. For more details see: GH Valuation Ratios

[2] Growth Is Very Strong

• Guardant Health has seen its top line grow at an average rate of 28.0% over the last 3 years
• Its revenues have grown 30% from $692 Mil to $903 Mil in the last 12 months
• Also, its quarterly revenues grew 38.5% to $265 Mil in the most recent quarter from $191 Mil a year ago.

This table highlights how GH is growing vs broader market. For more details see: GH Revenue Comparison

[3] Profitability Appears Very Weak

• GH last 12 month operating income was $-442 Mil representing operating margin of -49.0%
• With cash flow margin of -24.7%, it generated nearly $-223 Mil in operating cash flow over this period
• For the same period, GH generated nearly $-399 Mil in net income, suggesting net margin of about -44.2%

This table highlights how GH profitability vs broader market. For more details see: GH Operating Income Comparison

[4] Financial Stability Looks Very Strong

• GH Debt was $1.3 Bil at the end of the most recent quarter, while its current Market Cap is $12 Bil. This implies Debt-to-Equity Ratio of 11.4%
• GH Cash (including cash equivalents) makes up $580 Mil of $1.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 45.4%

[5] Downturn Resilience Is Weak

GH has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• GH stock fell 88.3% from a high of $179.10 on 12 February 2021 to $20.94 on 26 April 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $92.41 on 30 October 2025 $92.41

 
2020 Covid Pandemic

• GH stock fell 33.5% from a high of $88.81 on 21 February 2020 to $59.04 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 11 May 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read GH Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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