Guardant Health, Inc. (NASDAQ: GH)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0001576280
Market Cap 13.69 Bn
P/B -38.61
P/E -34.32
P/S 15.16
ROIC (Qtr) -45.49
Div Yield % 0.00
Rev 1y % (Qtr) 38.50
Total Debt (Qtr) 1.30 Bn
Debt/Equity (Qtr) -3.67

About

Guardant Health, Inc., often referred to as Guardant Health, is a company that operates in the precision oncology industry. Its primary focus is on the development and commercialization of innovative liquid biopsy tests that are designed to improve cancer diagnosis, treatment, and management. The company's stock symbol is GH. Guardant Health's main business activities involve the provision of liquid biopsy tests that enable the detection of cancer biomarkers in blood or other bodily fluids. The company operates in the precision oncology industry,...

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Price action

Investment thesis

Bull case

  • Tangible assets of 1.27B provide exceptional 27.06x coverage of deferred revenue 46.86M, showing strong service capability backing.
  • Tangible assets of 1.27B provide robust 5.85x coverage of other current liabilities 216.78M, indicating strong asset backing.
  • Strong cash position of 689.51M provides 3.18x coverage of other current liabilities 216.78M, indicating excellent liquidity.
  • Cash reserves of 689.51M provide robust 2.91x coverage of current liabilities 236.92M, indicating strong short-term solvency.
  • R&D investment of 359.47M represents healthy 7.67x of deferred revenue 46.86M, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of (222.90M) barely covers its investment activities of 288.39M, with a coverage ratio of -0.77, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 288.39M provide weak support for R&D spending of 359.47M, which is 0.80x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (222.90M) provides insufficient coverage of deferred revenue obligations of 46.86M, which is -4.76x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (222.90M) shows concerning coverage of stock compensation expenses of 159.39M, with a -1.40 ratio indicating potential earnings quality issues.
  • Free cash flow of (262.23M) provides weak coverage of capital expenditures of 39.33M, with a -6.67 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 234.48 Bn 35.69 5.36 35.68 Bn
2 DHR Danaher Corp /De/ 171.11 Bn 48.85 7.05 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 57.62 Bn 56.08 13.83 1.09 Bn
4 IQV Iqvia Holdings Inc. 42.37 Bn 33.03 2.66 15.19 Bn
5 A Agilent Technologies, Inc. 42.16 Bn 32.36 6.07 3.35 Bn
6 NTRA Natera, Inc. 31.64 Bn -102.32 14.95 0.18 Bn
7 MTD Mettler Toledo International Inc/ 30.89 Bn 36.96 7.84 2.21 Bn
8 WAT Waters Corp /De/ 23.59 Bn 36.37 7.60 1.49 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 11.17 2.82
EV to Cash from Ops. EV/CFO -63.97 19.55
EV to Debt EV to Debt 10.97 54.87
EV to EBIT EV/EBIT -36.17 18.82
EV to EBITDA EV/EBITDA -35.45 4.36
EV to Free Cash Flow [EV/FCF] EV/FCF -54.38 17.63
EV to Market Cap EV to Market Cap 1.04 1.58
EV to Revenue EV/Rev 15.80 5.06
Price to Book Value [P/B] P/B -38.61 1.35
Price to Earnings [P/E] P/E -34.32 18.88
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -2.00
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.94
Interest Coverage Int. cover (Qtr) -117.27 -128.90
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -93.88 -35.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 0.17 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 22.44 9.72
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.83 -444.66
EBIT Growth (1y) % EBIT 1y % (Qtr) 22.67 8.29
EBT Growth (1y) % EBT 1y % (Qtr) 22.40 -6.03
EPS Growth (1y) % EPS 1y % (Qtr) 25.00 15.59
FCF Growth (1y) % FCF 1y % (Qtr) 4.42 56.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 37.82 185.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.71 0.57
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 2.91 1.23
Current Ratio Curr Ratio (Qtr) 3.50 2.70
Debt to Equity Ratio Debt/Equity (Qtr) -3.67 -0.84
Interest Cover Ratio Int Coverage (Qtr) -117.27 -128.90
Times Interest Earned Times Interest Earned (Qtr) -117.27 -128.90
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -39.20 -97.22
EBIT Margin % EBIT Margin % (Qtr) -43.68 -115.64
EBT Margin % EBT Margin % (Qtr) -44.05 -114.24
Gross Margin % Gross Margin % (Qtr) 63.80 44.76
Net Profit Margin % Net Margin % (Qtr) -44.20 -113.12