CareDx, Inc. (NASDAQ: CDNA) has attracted significant attention lately, especially following a strong performance on Wednesday. The stock closed the regular trading session up by 6.6%, but the excitement didn’t end there. In afterhours trading, CareDx shares surged an impressive 30%, rising from $18.76 to $26.
Strong CareDX Q2 Results Drive Stock Surge
The afterhours rally is largely attributed to CareDx’s robust second-quarter results. The transplant diagnostics company reported a revenue of $92.3 million for Q2, surpassing the consensus estimate of $67.2 million set by analysts. Despite a loss of $1.4 million, or 3 cents per share, CareDx exceeded expectations when adjusted for stock option expenses and non-recurring costs, delivering an adjusted profit of 25 cents per share.
CareDx has also revised its full-year revenue outlook upward to between $320 million and $328 million, up from its previous forecast of $274 million to $282 million. The company anticipates a non-GAAP gross margin between 67% and 68%, improving from earlier estimates. Additionally, CareDx expects an adjusted EBITDA gain ranging from $9 million to $15 million, a positive shift from its earlier forecast of a loss.
It is worth noting that the stock has a high number of shorters, with at least 8.5% of its total float being shorted. This is important when gauging broader sentiment about CDNA. Moreover, this number is even more significant when considering that the market cap of the stock exceeds $1 billion.
Concerns and Market Response
The significant afterhours movement, with trading volumes exceeding 1.3 million shares, reflects investor optimism. However, there are concerns regarding CareDx’s substantial debt levels, which some analysts view as a potential risk. Despite these issues, the stock’s year-to-date increase of 66% and its 83% rise over the past 12 months highlight its strong market performance.
Conclusion
As CareDx continues to break new highs, it has already encountered upper resistance levels. The company’s recent achievements and optimistic outlook have sparked renewed interest among investors, signaling a bullish trend in its stock performance.
