Veracyte, Inc. (VCYT Quick QuoteVCYT - Free Report) outlined a more restrained near-term growth trajectory after Decipher Prostate testing fell short of management's expectations in the third quarter of 2026. Executives also detailed plans to increase commercial spending while developing newer breast and bladder cancer offerings.

The company reported adjusted earnings of $0.51 per share, beating the Zacks Consensus Estimate of $0.44. Revenues of $151.8 million surpassed the consensus mark of $147.3 million. The earnings beat came alongside a narrower annual sales outlook.

Veracyte, Inc. Price, Consensus and EPS Surprise

Veracyte, Inc. price-consensus-eps-surprise-chart | Veracyte, Inc. Quote

VCYT Resets Decipher Growth Expectations

Chief executive officer Marc Stapley said that  Decipher Prostate volumes grew 12% to nearly 30,000 tests, approximately 1,000 below expectations. He attributed the slowdown partly to normalization after unusually strong adoption following earlier clinical guideline updates.

Stapley also cited changes in low-risk prostate cancer testing patterns and increased physician attention to digital pathology. Management now expects incremental annual Decipher volume growth of 12,000 to 15,000 tests, using the lower end for planning.

During questioning from Leerink Partners, Stapley defended that floor as consistent with the second-half run rate. He emphasized that new physician ordering continues, while additional sales personnel should help address competition for physicians' attention.

Veracyte Moderates Its 2027 Outlook

Chief financial officer Rebecca Chambers lowered 2026 revenue guidance to $590 million-$593 million from $590 million-$596 million. Testing revenue guidance fell to $571 million-$573 million from $576 million-$582 million, although the company maintained its adjusted EBITDA margin target above 26%.

For 2027, Chambers outlined approximately 10% total test volume growth but only mid-single-digit revenue growth. She attributed the gap to difficult comparisons against prior-period collections and a growing mix of newer, lower-priced tests.

In response to Needham's questions, Chambers quantified the prior-period collections effect at roughly 200 basis points, with revenue mix contributing another roughly 200 basis points. She projected approximately 22% adjusted EBITDA margin in 2027, with margins approaching 25% by year-end.

VCYT Sees Afirma Strength Offset Prostate Pressure

Stapley said Afirma thyroid testing benefited from stronger physician utilization, market-share gains and improvements in the company's laboratory workflow. Volume climbed 12% to approximately 19,100 tests.

The updated transcriptome process reduced inconclusive results, contributing approximately 300 basis points to the quarter's year-over-year volume growth. Chambers raised Afirma's full-year revenue growth outlook to approximately 16% from 12%-14%.

Looking to 2027, Chambers expects approximately 5% Afirma volume growth as the company laps those workflow improvements. She also cautioned that unusually high prior-period collections in 2026 would complicate comparisons.

Veracyte Builds Prosigna's Commercial Reach

Stapley described encouraging early U.S. interest in Prosigna, supported by the OPTIMA trial's evidence concerning chemotherapy decisions. Medicare reimbursement now covers certain eligible postmenopausal breast cancer patients.

Management plans to expand the dedicated medical oncology salesforce to 15 representatives by year-end, double its initial goal. International Prosigna demand helped product revenue rise 40% during the quarter.

In analyst discussions, Stapley acknowledged that broader Medicare coverage for patients with greater lymph-node involvement could take years. Chambers added that Prosigna's near-term average selling price is expected to approximate its cost per test, limiting its initial revenue contribution.

VCYT Positions Bladder Tests for Later Growth

Stapley highlighted the Convergent Genomics acquisition, which added the urine-based UroAmp platform alongside tissue-based Decipher Bladder and blood-based TrueMRD testing.

He expects the first UroAmp application to launch in late 2028 with Medicare reimbursement, while Decipher Bladder receives greater commercial attention in 2027. Management sees more substantial contributions from the bladder portfolio beginning in 2028.

Responding to Canaccord Genuity, executives said that the existing urology sales channel could serve both prostate and bladder specialists. They emphasized complementary sample types and the opportunity to follow disease progression across treatment stages.

Veracyte Focuses on Execution Ahead of New Catalysts

Management's message centered on rebuilding Decipher's growth cadence while advancing clinical evidence and expanding commercial capacity. Stapley outlined plans to increase the urology commercial team by approximately 30% in 2027.

Chambers emphasized continued profitability and cash generation alongside growth investments. The company's newly authorized $100 million share repurchase program reinforces management's capital allocation priorities despite moderated near-term expectations.

Zacks Rank and Style Scores for VCYT

VCYT carries a Zacks Rank #3 (Hold), indicating a neutral ranking under Zacks' earnings-estimate revision framework. Its Growth Score of B identifies comparatively favorable growth characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, its Value Score of D, Momentum Score of F and combined VGM Score of D temper that signal. Zacks emphasizes stronger combinations of ranks and Style Scores for identifying potential outperformers. The Zacks Rank may change as analysts revise estimates following the newly reported results.