Guardant Health [NASDAQ: GH] is a global leader in cancer treatment by using propriety blood techniques, among other high tech analytics. The company went public in October 2018 and since then, it has been on a positive trajectory. It started trading at around $27.75 and has seen a high of $106.58. I originally called and posted the “double top” breakout on NASDAQ: GH when it technically broke-out of a double top at $50 on February 15, 2019 and then ran to over $100 by March 14, 2019 (in under 1 month). However, as of Friday’s close it was trading back at around $76.88 which is still up a huge amount from its IPO back in October of 2019 at around $27.75.
Guardant has followed in the trend of other Biopharma stocks that have been performing well recently, in spite of weakening sentiment in the entire market. Looking at the price action, GH closed Friday trading at $76.88 down 0.85%. This is a sign of strength considering that the entire market has not been performing well, due to the trade war, and other issues in the global economy. From the charts, GH seems to have established some level of support at around the $75 over the past few days and it has some key support around $72 which is the 50 day moving average. If these price levels hold and GH can sustain trading around the $71 to $72 range then GH could continue its bullish trend over the near term.
The company’s revenues are on a growth path. GH quarterly revenue (Q1) growth shows it increased around 119% (yoy) to $36.7 million. The reason behind part of this huge increase in revenues was because more doctors ordered and are using Guardant tests for their cancer patients. This is an indicator that its proprietary approach to cancer treatment are gaining a positive reception in the market. If revenues keep rising, they could positively impact other aspects of the business including gross profits and or the profit margins.
However, it also should be noted that the company is still losing money which is typical of most biopharma stocks. On top of that, the company is in the process of raising more capital through the markets. On the 22nd of May, the company announced the issuance of about 4.5 million shares of common stock to the public, at a price of around $71. At the time of making the offer, the company expected to raise roughly $319.5 million, which could help shore up its operations.
GH is one stock that has been on a move in 2019 and it still looks mighty attractive from a technical view as long as it can maintain the above said short term support levels.