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Should You Continue to Hold Veracyte Stock in Your Portfolio Now?
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Key Takeaways
VCYT is advancing its nasal swab NIGHTINGALE study and MRD platform for multi-tumor diagnostics.
VCYT's Decipher test volumes rose 37% in Q1, with 85 studies backing its role in prostate cancer care.
Veracyte is grappling with falling Biopharma revenues and cost pressures from macroeconomic headwinds.
Veracyte (VCYT - Free Report) is making solid progress in its long-term growth drivers, including in its NIGHTINGALE study for nasal swabs. The company’s Decipher franchise continues to be a strong tailwind, with remarkable test volume growth. Sound financial health also adds to the stock’s appeal. Meanwhile, declining Biopharma revenues and the adverse impacts of macroeconomic challenges raise concerns for Veracyte’s operations.
In the past year, this Zacks Rank #3 (Hold) stock has declined 0.1% compared with the13.7% fall of the industry and the S&P 500 composite’s 12.2% gain.
The renowned diagnostics company has a market capitalization of $2.09 billion. The company’s earnings yield of 4.9% is well ahead of the industry’s -3.6% yield. Veracyte topped earnings estimates in each of the trailing four quarters, the average surprise being 507.3%.
Positives for VCYT Stock
Progress With Long-Term Growth Drivers: Veracyte’s successful approach involves identifying medical needs, developing tests and securing clinical evidence, reimbursement and guideline inclusion to drive market penetration. The strategy enables them to invest in long-term growth drivers, such as making strong progress in its NIGHTINGALE study for nasal swab diagnostics, with more than 90% of its target 2,400 patients enrolled.
In addition, the company’s MRD platform was selected for the UMBRELLA trial, run by the Institute Gustave Roussy on approximately 700 patients. Investigators chose the MRD platform for its tissue-agnostic analytics validation, which enables the trial to include multiple tumor types. The first MRD indication, targeting muscle-invasive bladder cancer, will capitalize on Veracyte’s Decipher network with a planned launch in the first half of 2026. International expansion is another strategic pillar, with efforts to launch tests as IVDs.
Image Source: Zacks Investment Research
Strength of the Decipher Franchise: Decipher prostate cancer tests, a key revenue driver, saw strong growth in the first quarter of 2025, with more than 22,600 tests delivered, marking a 37% volume increase. It continues to experience broad-based expansion across each biopsy NCCN risk category, with similar growth in low, intermediate and high risk. With 85 clinical studies validating its utility, including 42 on biopsy samples, Decipher currently holds an estimated 65% market share. It remains the only NCCN-recommended gene expression test for prostate cancer treatment decisions. The approval for metastatic assessment and New York State clearance further expands its reach.
In late April, Decipher Prostate became available for use in the metastatic population on a limited basis and will be available broadly in June. As Decipher advances into the metastatic space and localized disease opportunities, Veracyte expects sustained growth in the years ahead. Furthermore, the company extended the Decipher franchise into the bladder, which addresses nearly 82,000 people expected to be diagnosed with bladder cancer annually in the United States.
Favorable Liquidity Position: Veracyte exited the first quarter of 2025 with cash and cash equivalents of $287 million and no current debt, reflecting strong solvency. The company’s ability to cover near-term obligations is further supported by a strong current ratio of 5.10 compared with the fourth-quarter 2024 level of 4.73. Consistent with the past quarters, it did not report any long-term debt at the end of the quarter under review.
What Ails Veracyte?
Biopharma Headwinds Remain: Veracyte continues to face significant declines in biopharma and other services revenues due to fewer customer projects, longer sales cycles and industry-wide spending constraints. Although the company offers services to pharmaceutical partners, the success of the Biopharma business depends on its ability to find and negotiate with suitable pharma partners. However, there is no guarantee that Veracyte will be successful in these efforts or that existing partnerships will remain in place.
Macro Issues Hurt Growth: Veracyte’s operations are susceptible to macroeconomic challenges, such as ongoing interest rate increases, and inflation in the United States and global markets, as well as turmoil in the global banking and finance system, among others. Further, ongoing geopolitical uncertainties and supply disruptions can potentially impact the company’s profit margin. In the first quarter of 2025, general and administrative expenses, and selling and marketing expenses rose 29% and 2.8%, respectively.
VCYT Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Veracyte’s 2025 EPS has remained stable at $1.32.
The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $493.7 million. This suggests a 10.8% rise from the year-ago reported number.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , Cardinal Health (CAH - Free Report) and Cencora (COR - Free Report) .
Phibro Animal Health has an estimated long-term earnings growth rate of 26% compared with the industry’s 13.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 30.6%. Its shares have rallied 60.5% compared with the industry’s 8.8% growth in the past year.
Cardinal Health, currently carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9% growth. Shares of the company have surged 67.7% against the industry’s 1.4% fall. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.
Cencora, carrying a Zacks Rank #2 at present, has an earnings yield of 5.3% compared with the industry’s 3.7%. Shares of the company have rallied 30.8% against the industry’s 20% decline. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%.
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Should You Continue to Hold Veracyte Stock in Your Portfolio Now?
Key Takeaways
Veracyte (VCYT - Free Report) is making solid progress in its long-term growth drivers, including in its NIGHTINGALE study for nasal swabs. The company’s Decipher franchise continues to be a strong tailwind, with remarkable test volume growth. Sound financial health also adds to the stock’s appeal. Meanwhile, declining Biopharma revenues and the adverse impacts of macroeconomic challenges raise concerns for Veracyte’s operations.
In the past year, this Zacks Rank #3 (Hold) stock has declined 0.1% compared with the13.7% fall of the industry and the S&P 500 composite’s 12.2% gain.
The renowned diagnostics company has a market capitalization of $2.09 billion. The company’s earnings yield of 4.9% is well ahead of the industry’s -3.6% yield. Veracyte topped earnings estimates in each of the trailing four quarters, the average surprise being 507.3%.
Positives for VCYT Stock
Progress With Long-Term Growth Drivers: Veracyte’s successful approach involves identifying medical needs, developing tests and securing clinical evidence, reimbursement and guideline inclusion to drive market penetration. The strategy enables them to invest in long-term growth drivers, such as making strong progress in its NIGHTINGALE study for nasal swab diagnostics, with more than 90% of its target 2,400 patients enrolled.
In addition, the company’s MRD platform was selected for the UMBRELLA trial, run by the Institute Gustave Roussy on approximately 700 patients. Investigators chose the MRD platform for its tissue-agnostic analytics validation, which enables the trial to include multiple tumor types. The first MRD indication, targeting muscle-invasive bladder cancer, will capitalize on Veracyte’s Decipher network with a planned launch in the first half of 2026. International expansion is another strategic pillar, with efforts to launch tests as IVDs.
Image Source: Zacks Investment Research
Strength of the Decipher Franchise: Decipher prostate cancer tests, a key revenue driver, saw strong growth in the first quarter of 2025, with more than 22,600 tests delivered, marking a 37% volume increase. It continues to experience broad-based expansion across each biopsy NCCN risk category, with similar growth in low, intermediate and high risk. With 85 clinical studies validating its utility, including 42 on biopsy samples, Decipher currently holds an estimated 65% market share. It remains the only NCCN-recommended gene expression test for prostate cancer treatment decisions. The approval for metastatic assessment and New York State clearance further expands its reach.
In late April, Decipher Prostate became available for use in the metastatic population on a limited basis and will be available broadly in June. As Decipher advances into the metastatic space and localized disease opportunities, Veracyte expects sustained growth in the years ahead. Furthermore, the company extended the Decipher franchise into the bladder, which addresses nearly 82,000 people expected to be diagnosed with bladder cancer annually in the United States.
Favorable Liquidity Position: Veracyte exited the first quarter of 2025 with cash and cash equivalents of $287 million and no current debt, reflecting strong solvency. The company’s ability to cover near-term obligations is further supported by a strong current ratio of 5.10 compared with the fourth-quarter 2024 level of 4.73. Consistent with the past quarters, it did not report any long-term debt at the end of the quarter under review.
What Ails Veracyte?
Biopharma Headwinds Remain: Veracyte continues to face significant declines in biopharma and other services revenues due to fewer customer projects, longer sales cycles and industry-wide spending constraints. Although the company offers services to pharmaceutical partners, the success of the Biopharma business depends on its ability to find and negotiate with suitable pharma partners. However, there is no guarantee that Veracyte will be successful in these efforts or that existing partnerships will remain in place.
Macro Issues Hurt Growth: Veracyte’s operations are susceptible to macroeconomic challenges, such as ongoing interest rate increases, and inflation in the United States and global markets, as well as turmoil in the global banking and finance system, among others. Further, ongoing geopolitical uncertainties and supply disruptions can potentially impact the company’s profit margin. In the first quarter of 2025, general and administrative expenses, and selling and marketing expenses rose 29% and 2.8%, respectively.
VCYT Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Veracyte’s 2025 EPS has remained stable at $1.32.
The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $493.7 million. This suggests a 10.8% rise from the year-ago reported number.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , Cardinal Health (CAH - Free Report) and Cencora (COR - Free Report) .
Phibro Animal Health has an estimated long-term earnings growth rate of 26% compared with the industry’s 13.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 30.6%. Its shares have rallied 60.5% compared with the industry’s 8.8% growth in the past year.
PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health, currently carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9% growth. Shares of the company have surged 67.7% against the industry’s 1.4% fall. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.
Cencora, carrying a Zacks Rank #2 at present, has an earnings yield of 5.3% compared with the industry’s 3.7%. Shares of the company have rallied 30.8% against the industry’s 20% decline. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%.