Why Guardant Health Stock Is Crashing

 Shares of Guardant Health (GH -21.74%) were trading 23.4% lower as of 11:51 a.m. ET on Friday. The steep decline came after the company announced its first-quarter results following the market close on Thursday.

The medical testing specialist reported Q1 revenue of $96.1 million, up 22% year over year. This result was in line with Wall Street estimates. It posted a Q1 net loss of $123.2 million, or $1.21 per share, based on generally accepted accounting principles (GAAP). This result was worse than its GAAP net loss of $1.09 per share in the prior-year period. However, it too was in line with analysts' consensus estimate.

Guardant Health also reaffirmed its guidance for 2022. The company still expects revenue in the range of $460 million to $470 million. At the midpoint, that would amount to an increase of 24.5% from 2021.

NASDAQ: GH

Guardant Health, Inc.

Today's Change

(-21.74%) -$11.03

Current Price

$39.70

 GH

KEY DATA POINTS

Market Cap

$5B

Day's Range

$36.33 - $47.65

52wk Range

$36.33 - $137.84

Volume

3,544,922

Avg Vol

995,644

P/E (ttm)

Friday morning's sell-off might seem overdone considering that Guardant Health's first-quarter numbers met analysts' estimates. The problem for the company is that merely meeting expectations was not enough considering the premium valuation the stock was trading at prior to the report.

Guardant Health's shares are now down more than 70% from the 52-week high. However, it still trades at nearly 17 times sales.

But the company's long-term prospects still appear to be quite good. It continues to pick up additional approvals and positive reimbursement decisions for its Guardant360 CDx companion diagnostic product. It also recently launched Shield, a laboratory-developed blood test that detects early-stage colorectal cancer.

The company has a larger-scale study of its Shield product still underway, and expects to report the results from that trial, dubbed ECLIPSE, in the second half of 2022. Guardant Health co-founder and co-CEO AmirAli Talasaz stated that if these results are close to the validation performance for the laboratory-developed test, the company believes that Shield will become the leading non-invasive test for colorectal cancer.

https://www.fool.com/investing/2022/05/06/why-guardant-health-stock-is-crashing-today/

Why Endo Stock Is Cratering

 Endo International (ENDP -29.45%) stock was cratering on Friday, with shares falling 31.6% as of 11:49 a.m. ET. The sharp sell-off came after the drugmaker announced its first-quarter results following the market close on Thursday.

The company reported Q1 net revenue of $652.3 million, down 9% year over year. This result was in line with the consensus estimate.

Endo posted adjusted earnings in the first quarter of $155.9 million, or $0.66 per share. The average analysts' estimate was for net income of $0.44 per share.

NASDAQ: ENDP

Endo International plc

Today's Change

(-29.45%) -$0.59

Current Price

$1.43

 ENDP

KEY DATA POINTS

Market Cap

$475M

Day's Range

$1.28 - $1.52

52wk Range

$1.28 - $7.07

Volume

15,143,860

Avg Vol

4,578,207

P/E (ttm)

Why did the pharma stock sink after beating Q1 estimates? Endo's guidance for the second quarter disappointed investors in a major way.

The company projects Q2 revenue between $500 million and $525 million. That's nowhere close to the consensus estimate of $655.6 million. Endo also anticipates a Q2 adjusted net loss per share between $0.17 and $0.15. Analysts were looking for positive adjusted earnings of $0.48 per share.

Endo CEO Blaise Coleman acknowledged "challenging market dynamics" for Vasostrict with the drug losing exclusivity. The company's sterile injectable sales fell 22% year over year in the first quarter due primarily to generic competition for Vasostrict.

It seems likely that Endo could continue to face stiff competition on several fronts throughout this year. There are so many uncertainties that the company didn't provide guidance beyond the second quarter. 

However, Endo could have brighter prospects in the future. The company plans to initiate a new clinical study of Qwo this quarter that could pave the way for expanding its use in treating cellulite. Endo also recently acquired six injectable pipeline candidates from Nevakar. The first commercial launch from these programs could be on the way in 2025 if all goes well. 

https://www.fool.com/investing/2022/05/06/why-endo-international-stock-is-cratering-today/