CDNA · CareDx
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $71.52
Note written ·
Price against the kill line
8.9% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
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 below $71.52, on record since 10 November 2026. The shares are up 67.9% 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 below $71.52, the 29 October 2026 close before the third-quarter report, which would erase the entire post-earnings gain. Fourth-quarter revenue below the $131 million guide floor, or final 2027 Medicare rates setting AlloSure below $2,753.25, would also show the case failing.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 139
- Revenue, change on a year (%)
- +39.3
- Operating margin (%)
- 5.8
- Net cash, cash less debt ($M)
- 251
- Price to earnings (×)
- 31.8
- Enterprise value to sales (×)
- 7.7
- Enterprise value to operating income (×)
- 33.0
All filed numbers
What CareDx reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 139 | +39.3 | 5.8 |
| first filed | 132 | +52.2 | 85.8 |
| first filed | 118 | +39.0 | 1.0 |
| first filed | 108 | +25.2 | −5.6 |
| first filed | 100 | +20.7 | −0.2 |
| first filed | 86.7 | −6.1 | −12.8 |
| Pre-tax income ($M) | 10.7 |
| Net income ($M) four quarters: 129 | 19.3 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +2.3 |
| Operating cash flow ($M) | 69.0 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 251 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 251 |
| Deferred revenue ($M) +20.5% on a year | 6.9 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 47.7 |
| Inventory ($M) | 9.1 |
| Shareholders' equity ($M) | 468 |
| Market value ($M) | 4,092 |
| Enterprise value, market value plus net debt ($M) no debt reported | 3,842 |
| Enterprise value to sales (×) no debt reported | 7.7 |
| Enterprise value to operating income (×) no debt reported | 33.0 |
| Price to earnings (×) | 31.8 |
| Price to book value (×) | 8.8 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 12.8% of shares outstanding sold short, 4.5 days of average trading to cover, +1.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $5.2M |
| 12 monthsfrom | $0 | $18.4M |
The thesis
CareDx's shares are modestly more likely than not to beat the S&P 500 over the next three months. The company's transplant testing business grew 39% in the third quarter even after stripping out catch-up revenue, and it raised 2026 revenue guidance to $520–530 million on 29 October 2026. Two events settle the case: the final 2027 Medicare rates from CMS (the Centers for Medicare & Medicaid Services), which CMS says it will publish in November 2026, and the fourth-quarter report expected in late February 2027.
The shares closed at $79.81 on 12 November 2026, above the $70.33 average analyst target that MarketBeat reported across nine firms on 12 November 2026. The price already reflects the raised guidance. What it does not yet reflect is a final Medicare rate, and the preliminary rate moved in CareDx's favour.
New coverage leans positive. Piper Sandler initiated coverage on 11 November 2026 with an Overweight rating and a $100 target, per Benzinga. Insiders kept selling under pre-set trading plans: the chief financial officer sold 61,961 shares at an average $77.82 on 5 November 2026, per his SEC Form 4. The rating is Medium because the operating evidence is strong but the next decisive facts are a pricing decision and a report whose guidance steps down from the third quarter.
Bullish and bearish views on CareDx, Inc.
The bull case on CareDx, Inc. (CDNA), in brief: underlying transplant growth held up. The bear case: the fourth-quarter guide steps down.
Bull case
- Underlying transplant growth held up. Excluding prior-period revenue, transplant revenue rose 39% year over year and 9% from the second quarter, per the 29 October 2026 earnings call. Kidney testing grew "well over 20%" and heart testing grew in the mid-teens.
- Guidance rose for a second straight quarter. On 29 October 2026 CareDx raised 2026 revenue guidance to $520–530 million from $490–500 million. It raised adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) guidance to $90–100 million from $66–78 million, per its Form 8-K exhibit.
- The filing backs the reported growth. The third-quarter Form 10-Q shows testing-services revenue of $119.2 million against $72.2 million a year earlier. Total revenue was $139.4 million against $100.1 million.
- Medicare's preliminary rate moved up. CMS's preliminary 2027 schedule of 21 September 2026 raises AlloSure to $2,840 from $2,753.25 and leaves AlloMap at $3,240. CMS put the schedule as a whole about 16% below 2026 rates on average, so CareDx's tests run against the broader trend.
- The oncology business beat plan. Naveris's NavDx test contributed 15,150 tests at an $823 average selling price in its first full quarter, per the 29 October 2026 call, above the $775 forecast.
- Three firms now sit above the price. Piper Sandler initiated at Overweight with a $100 target on 11 November 2026, per Benzinga. BTIG raised its target to $92 with a Buy rating on 30 October 2026, and H.C. Wainwright raised its target to $90 from $46 on 2 November 2026 while keeping a Neutral rating.
Bear case
- The fourth-quarter guide steps down. CareDx guided fourth-quarter revenue to $131–141 million on 29 October 2026; the bottom of that range is below the third quarter's $139.4 million. The guide calls for 61,000–63,000 transplant tests.
- Catch-up revenue flatters the totals. Prior-period testing revenue was $14.7 million net in the third quarter and $44.5 million net in the first nine months of 2026, per the Form 10-Q. Growth will look slower as those collections fade.
- Medicare concentration is rising. Medicare was about 31% of third-quarter revenue and about 25% of accounts receivable on 30 September 2026, up from 21% on 31 December 2025, per the 10-Q. One rate decision carries more weight than a year ago.
- Insiders are selling into the rally. Chief financial officer Keith Kennedy exercised 52,422 options at $29.43 and sold 61,961 shares at $76.55–$83.60 on 5 November 2026, and general counsel Jeffrey Novack sold 4,096 shares at an average $81.13 on 10 November 2026, both under Rule 10b5-1 plans, per SEC Form 4 filings.
- A large fund cut its stake. ARK's Genomic Revolution ETF sold 113,168 CareDx shares worth $8,638,113 and bought Natera, CareDx's main transplant-testing competitor, per Investing.com on 6 November 2026.
- The average target trails the price. MarketBeat's average target of $70.33 across nine firms on 12 November 2026 sits below the $79.81 close the same day.
Price setup
The shares closed at $79.81 on 12 November 2026, up 76.1% over three months from $45.32 on 14 August 2026. The 52-week intraday high is $90.87, set on 30 October 2026, the session after the third-quarter report; the last close is 12.2% below it. The 52-week closing low is $15.51 on 17 November 2025.
Closes have drifted lower since $84.42 on 9 November 2026: $80.77 on 10 November 2026, $81.17 on 11 November 2026 and $79.81 on 12 November 2026. The most recent low close is $76.33 on 5 November 2026. Below that, the 29 October 2026 close marks where the shares stood before the report; a close beneath it would erase the whole post-earnings gain.
The 50-day moving average is $65.78 and the 200-day moving average is $36.42, both as of 12 November 2026 in adjusted daily closes. The gap between the price and both averages records how far the shares have run since August.
Catalysts ahead
- ~30 November 2026 (est.): CMS publishes final 2027 clinical lab fee schedule rates (November 2026, exact day unconfirmed). It confirms or revises the preliminary $2,840 AlloSure rate behind the Medicare part of the pricing gains, effective 1 January 2027.
- ~31 December 2026 (est.): Lab certification (CLIA) readiness for AlloHeme and HistoMap Kidney, targeted before year-end. Meeting it keeps the planned first-quarter 2027 AlloHeme launch on schedule and adds products beyond kidney and heart surveillance.
- ~25 February 2027 (est.): CareDx fourth-quarter 2026 report and first 2027 guidance. It shows whether transplant tests reach the 61,000–63,000 guide and how much growth remains once prior-period revenue fades.
What would change the view
A daily close below $71.52, the 29 October 2026 close before the third-quarter report, which would erase the entire post-earnings gain. Fourth-quarter revenue below the $131 million guide floor, or final 2027 Medicare rates setting AlloSure below $2,753.25, would also show the case failing.
The risks this note tracks, each with what would confirm it:
- Transplant growth slows once prior-period revenue shrinks, and the fourth-quarter step-down in guidance proves to be the start of a trend. Confirmed by: fourth-quarter revenue below the $131 million guide floor or transplant tests below 61,000 at the early-2027 report.
- Final 2027 Medicare rates reverse the preliminary AlloSure increase. Confirmed by: CMS's final clinical lab fee schedule publication setting AlloSure below the current $2,753.25.
- Reimbursement restrictions narrow coverage of transplant surveillance testing, with Medicare about 31% of third-quarter revenue. Confirmed by: a published MolDX billing or coding restriction on transplant surveillance testing, or a CareDx disclosure acknowledging one.
- Insider selling widens beyond pre-set trading plans as the shares trade above the average analyst target. Confirmed by: SEC Form 4 open-market sales by the chief executive or chief financial officer made outside a Rule 10b5-1 plan.
- Naveris integration or contingent payments weigh on margins and cash. Confirmed by: specialty oncology revenue per test falling below the $775 forecast, or a contingent-consideration charge in a later filing against the $44.2 million balance on 30 September 2026.
- The Natera patent dispute creates a new legal cost or liability. Confirmed by: an appellate ruling reinstating Natera's '544 patent, or a CareDx filing recording a loss accrual tied to the Natera patents.
What it trades with
CareDx trades against Natera in transplant testing, and fund flows link the two: ARK's trades reported on 6 November 2026 sold CareDx and bought Natera. Both companies and the wider lab-testing group face the same CMS fee schedule, which CMS put about 16% below 2026 rates on average in its 21 September 2026 preliminary release. With a $3.7 billion market value on 30 October 2026, per Benzinga, the shares move more on company-specific reimbursement and earnings news than on broad market direction.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $139.4 million against $100.1 million a year earlier; testing-services revenue was $119.2 million against $72.2 million. CareDx Q3 2026 Form 10-Q · as of
- Prior-period testing revenue was $14.7 million net in Q3 2026 and $44.5 million net in the first nine months of 2026. CareDx Q3 2026 Form 10-Q · as of
- CareDx raised 2026 revenue guidance to $520–530 million from $490–500 million and adjusted EBITDA guidance to $90–100 million from $66–78 million. CareDx Q3 2026 earnings release (Form 8-K exhibit) · as of
- Fourth-quarter 2026 guidance: revenue $131–141 million, transplant tests 61,000–63,000, specialty oncology tests 15,000–17,000, adjusted EBITDA $16–26 million. CareDx Q3 2026 earnings call · as of
- Preliminary 2027 Medicare clinical lab fee schedule rates raise AlloSure from $2,753.25 to $2,840 and leave AlloMap unchanged at $3,240; CMS plans to publish final rates in November 2026. CMS preliminary CY 2027 CLFS fact sheet · as of
- Medicare was about 31% of Q3 2026 revenue and about 25% of accounts receivable on 30 September 2026, up from 21% on 31 December 2025. CareDx Q3 2026 Form 10-Q · as of
- CFO and COO Keith Kennedy exercised 52,422 options at $29.43 and sold 61,961 shares at an average $77.82 under a Rule 10b5-1 plan. SEC Form 4 filed 9 November 2026 · as of
- Piper Sandler initiated coverage of CareDx with an Overweight rating and a $100 price target. Benzinga, 11 November 2026 · as of
Sources
- CareDx, Inc. - Form 10-Q - FY2026 · sec.gov
- CareDx, Inc. - Form 8-K - FY2026 · sec.gov
- Preliminary Calendar Year (CY) 2027 Medicare Clinical Laboratory Fee Schedule Payment Rates · cms.gov
- Piper Sandler Initiates CareDx (CDNA) Coverage with Overweight Rating and $100 Price Target · gurufocus.com
- CareDx, Inc. (NASDAQ:CDNA) Stock Now Rated "Moderate Buy" by Sell-Side Brokerages · defenseworld.net ·
- CareDx (NASDAQ:CDNA) Stock: Insider Keith Kennedy Sells 61,961 Shares · marketbeat.com ·
- Cathie Wood's ARK sells CareDx stock, buys Natera and Kratos · investing.com ·
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