CAI · Caris Life Sciences
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $29.45
Note written ·
Price against the kill line
21.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $29.45, on record since 11 November 2026. The shares are up 6.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $29.45, the 50-day average of adjusted closes on 11 November 2026, which would show the shares recovering the post-report loss and leading the S&P 500. A full-year 2026 revenue result above the $1.050 billion top of guidance would also point that way.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 275
- Revenue, change on a year (%)
- +27.0
- Operating margin (%)
- 7.0
- Net cash, cash less debt ($M)
- 441
- Price to earnings (×)
- 68.8
- Enterprise value to sales (×)
- 5.9
- Enterprise value to operating income (×)
- 44.1
All filed numbers
What Caris Life Sciences reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 275 | +27.0 | 7.0 |
| first filed | 264 | +45.4 | 10.2 |
| first filed | 216 | +78.8 | 2.4 |
| first filed | 293 | +125.4 | 30.2 |
| first filed | 217 | +113.4 | 15.1 |
| first filed | 181 | +81.3 | −9.9 |
| Pre-tax income ($M) | 16.9 |
| Net income ($M) four quarters: 96.1 | 15.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −0.7 |
| Operating cash flow ($M) | 83.9 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) at 31 March 2026, filed 8 May 2026 | 822 |
| Debt ($M) long-term debt | 393 |
| Net cash, cash less debt ($M) at 31 March 2026, filed 8 May 2026 | 441 |
| Deferred revenue ($M) +558.3% on a year | 18.9 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 133 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 640 |
| Market value ($M) | 6,608 |
| Enterprise value, market value plus net debt ($M) | 6,166 |
| Enterprise value to sales (×) | 5.9 |
| Enterprise value to operating income (×) | 44.1 |
| Price to earnings (×) | 68.8 |
| Price to book value (×) | 10.3 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.7% of shares outstanding sold short, 3.2 days of average trading to cover, −2.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $27.2M |
| 12 monthsfrom | $1.5M | $28.9M |
The thesis
Caris Life Sciences beat third-quarter revenue estimates and raised its 2026 revenue guidance, but growth slowed to 27%, margins fell and free cash flow turned negative, so the shares look more likely to lag the S&P 500 than lead it over the next three months. The fourth-quarter report, expected around 25 February 2027, settles whether case growth and margins recover.
Third-quarter revenue was $275.4 million, up 27%, against a $255.4 million estimate cited by Benzinga on 4 November 2026. Second-quarter revenue had grown 45%. Operating expenses rose 42% to $163.0 million, and free cash flow was negative $39.7 million, against positive $55.3 million a year earlier, per the company's release.
Full-year 2026 revenue guidance rose to $1.04–1.05 billion from $1.030–1.040 billion, or 28% to 29% growth. The shares closed at $33.22 on 4 November 2026, the day of the report, and at $26.03 on 5 November 2026, when Benzinga described an AI-led market sell-off after the midterm elections. They closed at $24.49 on 11 November 2026.
Bullish and bearish views on Caris Life Sciences, Inc.
The bull case on Caris Life Sciences, Inc. (CAI), in brief: revenue and guidance beat expectations. The bear case: revenue growth slowed sharply.
Bull case
- Revenue and guidance beat expectations. Third-quarter revenue of $275.4 million topped Benzinga's $255.4 million estimate, and earnings of $0.05 per share topped its $0.04 estimate. The new 2026 range of $1.04–1.05 billion compares with a $1.03 billion estimate, per Benzinga on 4 November 2026.
- Case growth picked up. Clinical cases rose about 21% to approximately 61,500 in the third quarter, after about 18% growth in the second, per company releases. On 4 November 2026 the company reaffirmed about 20% growth in clinical therapy-selection volume for 2026.
- Three analysts stayed positive after the report. TD Cowen raised its target to $38 from $36 and kept a Buy rating on 5 November 2026, and BTIG kept its Buy rating and $38 target the same day, per Benzinga. Citigroup kept its Buy rating and raised its target to $36 on 6 November 2026, per Benzinga.
- The balance sheet can carry the spending. Caris held $665.3 million in cash, cash equivalents and restricted cash, plus $102.1 million in short-term marketable securities, on 30 September 2026, per its release. It repurchased $31.4 million of stock in the first nine months of 2026.
- The test menu is still expanding. Caris announced the launch of Caris Assure Therapy Response Monitoring on 9 November 2026. The 4 November 2026 release targets a launch of Caris Confirm before year-end and counts more than 1.2 million total profiles through 30 September 2026.
Bear case
- Revenue growth slowed sharply. Revenue growth fell to 27% in the third quarter from 45% in the second, and molecular profiling services growth fell to 27% from 55%, per company releases. Revenue growth now runs close to the 21% growth in cases, so price gains contributed far less than in the second quarter.
- The fourth-quarter comparison is hard. Fourth-quarter 2025 revenue was $292.9 million and included prior-year over-collections, per the company's 26 February 2026 guidance. Full-year revenue above $1.050 billion would show the guide was cautious.
- Spending outran gross profit. Operating expenses rose 42% to $163.0 million on headcount, research and marketing, while gross profit rose to $182.3 million from $147.5 million, per the release. Operating income fell to $19.3 million from $32.6 million, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell to $44.4 million from $51.2 million.
- Margin and cash flow reversed. Gross margin was 66% against 68% a year earlier and 68% in the second quarter. Operating cash flow was negative $22.2 million, and free cash flow was negative $39.7 million after positive $6.4 million in the second quarter, per company releases.
- One analyst sits near the share price. Piper Sandler kept a Neutral rating and raised its target to $25 on 10 November 2026, per Benzinga, against a $24.49 close on 11 November 2026.
- Executives sold into the run-up. SEC Form 4 filings show President David Spetzler sold 597,212 shares at an average $24.84 on 3 September 2026 and 4 September 2026, director Brian Brille sold 400,000 shares at $30.33 on 17 September 2026, and officer John Denton sold 7,500 shares at $31.82 on 22 September 2026. The Form 4 rows list no open-market purchases.
Price setup
The shares reached an intraday 52-week high of $36.50 on 28 October 2026, and the last close of $24.49 on 11 November 2026 is 32.9% below it. After the $33.22 close on 4 November 2026, Investing.com put the after-hours price at about $28.95, so the first leg of the fall followed the report. The close of $26.03 on 5 November 2026 then came during the market-wide sell-off.
Closes since have held a narrow range: $25.23 on 6 November 2026, $25.57 on 9 November 2026, $24.43 on 10 November 2026 and $24.49 on 11 November 2026. The shares sit below their 50-day average and above their 200-day average of $21.65 (adjusted closes, as of 11 November 2026). The 3-month change is 10.4%, from a $22.18 close on 13 August 2026.
The market has priced out most of the run to the October high, and the $25 Piper Sandler target on 10 November 2026 sits close to the price, while MarketBeat's consensus target was $29.91 on 5 November 2026. Below the 200-day average, the next reference points are the $21 initial public offering price of 18 June 2025 and the closing low of $14.55 on 15 May 2026.
Catalysts ahead
- by 31 December 2026 (target): Launch of Caris Confirm, targeted before year-end in the 4 November 2026 results release. Shows whether the company delivers the next addition to its test menu on the schedule it set.
- ~25 February 2027 (est.): Fourth-quarter 2026 results and first 2027 guidance. Settles whether full-year 2026 revenue clears the $1.04–1.05 billion range, clinical volume growth reaches about 20%, and gross margin and free cash flow recover.
What would change the view
A daily close above $29.45, the 50-day average of adjusted closes on 11 November 2026, which would show the shares recovering the post-report loss and leading the S&P 500. A full-year 2026 revenue result above the $1.050 billion top of guidance would also point that way.
What it trades with
The shares trade as an AI-branded precision-oncology growth stock, since Caris calls itself an AI-driven "TechBio" company. They closed lower on 5 November 2026 alongside the AI sell-off Benzinga described, in which Nvidia, AMD and Micron fell and the VIX volatility index rose 39%. One session is too small a sample to measure the link.
Company-specific moves come from a peer set of Tempus AI, Guardant Health, Natera and Exact Sciences, which compete with Caris for oncology testing volume and payer coverage. High-multiple health care stocks also remain exposed to long-term yields, as the hot September 2026 inflation report showed.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $275.4 million, up 27% from $216.8 million; molecular profiling services revenue was $262.7 million, up 27%. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- FY2026 revenue guidance was raised to $1.04–1.05 billion from $1.030–1.040 billion, implying 28% to 29% growth; about 20% clinical therapy-selection volume growth was reaffirmed. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- Clinical cases were approximately 61,500 in the third quarter, up about 21% year over year. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- Third-quarter operating expenses rose 42% to $163.0 million; gross margin was 66% against 68%; operating income was $19.3 million against $32.6 million. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- Third-quarter free cash flow was negative $39.7 million against positive $55.3 million a year earlier; adjusted EBITDA was $44.4 million against $51.2 million. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- Cash, cash equivalents and restricted cash were $665.3 million and short-term marketable securities were $102.1 million at the end of the third quarter. Caris Q3 2026 results release (8-K Exhibit 99.1) · as of
- Piper Sandler maintained a Neutral rating and raised its price target to $25; Citigroup maintained Buy and raised its target to $36 on 6 November 2026. Benzinga analyst headlines · as of
- President David Spetzler sold 597,212 shares at an average $24.84 on 3 September to 4 September 2026 after exercising 1,250,000 options at $2.44. SEC Form 4 filed 4 September 2026 · as of
Sources
- Caris Life Sciences, Inc. - Form 8-K - FY2026 · sec.gov
- Caris Life Sciences raises 2026 revenue guidance to $1.04B · stocktitan.net ·
- Caris Life Sciences stock falls after hours despite Q3 beat, BTIG maintains buy · investing.com
- Caris Life Sciences (NASDAQ:CAI) Shares Gap Down - What's Next? · marketbeat.com ·
- Caris Q3 Profit Falls On Higher Expenses; Raises FY26 Revenue Guidance After 27% Revenue Growth · rttnews.com
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