Guardant Health: Study Closure Does Not Materially Change Our View

On Sept. 1, Guardant Health announced the closure of one of its minimal residual disease, or MRD, studies, which featured the Guardant Reveal test. Shares fell about 10% that day, implying investor concern about the implications of the study closure on the firm’s prospects. However, after hearing management’s explanation for the study closure and reviewing the assumptions in our model, we expect to trim our forecasts only minimally, with no material impact on our $63 fair value estimate. With the significant stock price decline, shares still look undervalued to us.