Guardant Health (NASDAQ:GH): Strongest Q3 Results from the Testing & Diagnostics Services Group

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Guardant Health (NASDAQ:GH) and its peers.

The testing and diagnostics services industry plays a crucial role in disease detection, monitoring, and prevention, serving hospitals, clinics, and individual consumers. This sector benefits from stable demand, driven by an aging population, increased prevalence of chronic diseases, and growing awareness of preventive healthcare. Recurring revenue streams come from routine screenings, lab tests, and diagnostic imaging, with reimbursement from Medicare, Medicaid, private insurance, and out-of-pocket payments. However, the industry faces challenges such as pricing pressures, regulatory compliance, and the need for continuous investment in new testing technologies. Looking ahead, industry tailwinds include the expansion of personalized medicine, increased adoption of at-home and rapid diagnostic tests, and advancements in AI-driven diagnostics that enhance accuracy and efficiency. However, headwinds such as reimbursement uncertainties, competition from decentralized testing solutions, and regulatory scrutiny over test validity and cost-effectiveness may impact profitability. Adapting to evolving healthcare models and integrating automation will be key for sustaining growth and maintaining operational efficiency.

The 5 testing & diagnostics services stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.9%.

Luckily, testing & diagnostics services stocks have performed well with share prices up 12.5% on average since the latest earnings results.

Best Q3: Guardant Health (NASDAQ:GH)

Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ:GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.

Guardant Health reported revenues of $265.2 million, up 38.5% year on year. This print exceeded analysts’ expectations by 12.6%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ revenue estimates and full-year revenue guidance exceeding analysts’ expectations.

“This was an exceptional quarter for Guardant with broad-based growth across our business,” said Helmy Eltoukhy, co-founder and co-CEO.

Guardant Health pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 50.2% since reporting and currently trades at $108.55.

We think Guardant Health is a good business, but is it a buy today? Read our full report here, it’s free.

RadNet (NASDAQ:RDNT)

With over 350 imaging facilities across seven states and a growing artificial intelligence division, RadNet (NASDAQ:RDNT) operates a network of outpatient diagnostic imaging centers across the United States, offering services like MRI, CT scans, PET scans, mammography, and X-rays.

RadNet reported revenues of $522.9 million, up 13.4% year on year, outperforming analysts’ expectations by 6.3%. The business had a strong quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.5% since reporting. It currently trades at $73.20.

Is now the time to buy RadNet? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Labcorp (NYSE:LH)

With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE:LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.

Labcorp reported revenues of $3.56 billion, up 8.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ organic revenue estimates.

Labcorp delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 4.9% since the results and currently trades at $262.02.

Read our full analysis of Labcorp’s results here.

Quest (NYSE:DGX)

Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE:DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.

Quest reported revenues of $2.82 billion, up 13.2% year on year. This result topped analysts’ expectations by 3.3%. It was a strong quarter as it also logged an impressive beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.

Quest pulled off the highest full-year guidance raise among its peers. The stock is down 1.9% since reporting and currently trades at $186.81.

Read our full, actionable report on Quest here, it’s free.

NeoGenomics (NASDAQ:NEO)

Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ:NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.

NeoGenomics reported revenues of $187.8 million, up 11.9% year on year. This number beat analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also recorded EPS in line with analysts’ estimates and a solid beat of analysts’ revenue estimates.

NeoGenomics had the weakest full-year guidance update among its peers. The stock is up 25.6% since reporting and currently trades at $13.19.

Read our full, actionable report on NeoGenomics here, it’s free.

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