GH · Guardant Health
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $185.31
Note written ·
Price against the kill line
18.1% 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 $185.31, on record since 11 November 2026. The shares are down 6.2% 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 $185.31, close to the late-October closing highs, which would show the shares leading the S&P 500 again. A 2026 screening revenue result above the $238 million top of the current guide would also show the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 361
- Revenue, change on a year (%)
- +36.1
- Gross margin (%)
- 65.4
- Operating margin (%)
- −36.8
- Free cash flow, four quarters ($M)
- −232
- Net cash, cash less debt ($M)
- −476
- Enterprise value to sales (×)
- 16.4
- Free-cash-flow yield (%)
- −1.1
All filed numbers
What Guardant Health 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 ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 361 | +36.1 | 65.4 | −36.8 |
| first filed | 335 | +44.3 | 65.4 | −38.5 |
| first filed | 302 | +48.3 | 65.2 | −40.2 |
| first filed | 281 | +39.4 | 64.6 | −43.0 |
| first filed | 265 | +38.5 | 64.7 | −37.3 |
| first filed | 232 | +30.9 | 65.0 | −45.9 |
| Pre-tax income ($M) | −124 |
| Net income ($M) four quarters: −485 | −124 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +7.7 |
| Operating cash flow ($M) | −174 |
| Capital spending ($M) | 58.7 |
| Free cash flow ($M) | −232 |
| Cash and short-term investments ($M) | 1,027 |
| Debt ($M) long-term debt | 1,502 |
| Net cash, cash less debt ($M) | −476 |
| Deferred revenue ($M) −20.0% on a year | 45.1 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 187 |
| Inventory ($M) | 93.5 |
| Shareholders' equity ($M) | −276 |
| Market value ($M) | 20,523 |
| Enterprise value, market value plus net debt ($M) | 20,998 |
| Enterprise value to sales (×) | 16.4 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | Not meaningful |
| Free-cash-flow yield (%) | −1.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 8.6% of shares outstanding sold short, 6.7 days of average trading to cover, −2.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $9.7M |
| 12 monthsfrom | $78K | $172.9M |
The thesis
Guardant Health's Shield blood test is growing quickly, but the shares are more likely to lag the S&P 500 over the next three months. Patent losses, wider cash-burn guidance and a $500 million convertible note sale compete with the revenue growth, and the fourth-quarter report, expected around 18 February 2027, settles whether new insurer coverage becomes tests and revenue.
Screening revenue was $67.6 million in the third quarter, up 180%, on 83,000 Shield tests, up 246%, according to the company's 5 November 2026 results. Guardant raised 2026 revenue guidance to $1.36–1.37 billion and screening revenue guidance to $233–238 million.
The shares did not follow the results. Adjusted daily closes fell from $168.58 on 4 November 2026 to $153.43 on 5 November 2026 and $150.87 on 6 November 2026, then recovered to $158.79 on 9 November 2026 before easing to $154.78 on 11 November 2026. The company then announced on 11 November 2026 and priced on 12 November 2026 a $500 million issue of 0% convertible senior notes due 2032 with a conversion price of $208.95, a 35.0% premium to the $154.78 last sale price, according to the company's announcement as reported by Investing.com.
The financing swaps debt rather than adding all of it. About $501.7 million of the proceeds goes to repurchase about $395.2 million principal of the company's 2027 convertible notes, and $51.7 million funds capped call transactions, per the same report. The company reports the capped call raises the effective price at which dilution starts to $309.56.
Bullish and bearish views on Guardant Health, Inc.
The bull case on Guardant Health, Inc. (GH), in brief: Shield volume and revenue accelerated. The bear case: patent losses keep accumulating.
Bull case
- Shield volume and revenue accelerated. Third-quarter Shield tests rose 246% to 83,000 and screening revenue rose 180% to $67.6 million, per the 5 November 2026 release. Guidance moved to 285,000–290,000 tests for 2026.
- Shield unit costs fell early. Management said on the 5 November 2026 call that cost per test was $330 in the third quarter, down from $410 in the second. The goal is $200 by the end of 2028.
- The debt maturity moves out. Guardant is using the new 2032 notes mainly to repurchase about $395.2 million of 2027 notes, per the 12 November 2026 pricing report. The capped call leaves effective dilution out of reach until $309.56 per share.
- Cash burn is partly timing. Guardant blamed a Medicare billing-code delay on Guardant360 Liquid CDx, which shifts $10–15 million of payments into the first half of 2027, per the 5 November 2026 call. The company held $1.1 billion in cash at 30 September 2026 and still targets free cash flow breakeven by the end of 2027.
- Coverage is still ahead of revenue. Carelon Shield coverage starts 15 November 2026 and EviCore coverage starts 1 January 2027, per company releases. Piper Sandler kept its Overweight rating on 10 November 2026, with a target of $190, after lowering it.
- Oncology volume remains strong. Third-quarter oncology tests rose 58% to 117,000 and oncology revenue rose 25% to $231.3 million, per the 5 November 2026 release. Guardant announced new epigenomic applications for Guardant360 Liquid on 11 November 2026.
Bear case
- Patent losses keep accumulating. TwinStrand Biosciences said a US Patent and Trademark Office notice dated 4 November 2026 confirmed all 23 claims of its '631 patent, after the 14 October 2026 ruling upholding all 30 claims of its '127 patent. The Delaware court's August 2026 judgment of $245.2 million is stayed pending appeal and carries a 6% ongoing royalty on 11 Guardant products through 15 March 2033, per TwinStrand.
- Cash burn guidance widened. Guardant raised 2026 free cash flow burn to $205–220 million from $195–205 million on 5 November 2026. Non-GAAP operating expense guidance rose to $1.105–1.125 billion.
- New debt and a larger share count loom. The $500 million notes carry an option for the initial purchasers to take up to $50 million more, per the 12 November 2026 pricing report. Holders can convert into shares at $208.95, and a securities registration filed 30 July 2026 still discloses no size.
- Shield pricing is set to slip. Management said on the 5 November 2026 call that average selling price, above $800 in the third quarter, should drift toward a stated $700 floor. UnitedHealthcare pricing talks have started and no terms exist.
- Coverage will take time to appear. Management said on the 5 November 2026 call that coverage gains will take "some time" to show in results, and it gave no fourth-quarter Shield volume figure.
- The company still reports losses. The third-quarter net loss was $124.4 million and adjusted loss per share was $(0.29), per the 5 November 2026 release, so no earnings multiple supports the shares.
Price setup
The 11 November 2026 close of $154.78 is 19.0% below the 52-week high of $191.05, set intraday on 6 October 2026. The shares are down 3.0% over three months, measured from the 13 August 2026 close of $159.54.
The close sits below the 50-day moving average of $169.0 and above the 200-day moving average of $132.35, both as of 11 November 2026. The 52-week closing low was $78.60 on 10 April 2026, so the shares have roughly doubled from it.
The conversion price of $208.95 sits above the 52-week high. Piper Sandler's $190 target of 10 November 2026 is the one analyst target dated after the 5 November 2026 report.
Catalysts ahead
- 15 November 2026: Carelon Shield coverage takes effect. It widens access to Shield, and any effect first appears in fourth-quarter results.
- 16 November 2026: Scheduled settlement of the $500 million 0% convertible notes due 2032. It completes the repurchase of about $395.2 million of 2027 notes and starts the 13-day window for the additional $50 million option.
- 31 December 2026: Management's year-end timetable for the Reveal Ultra clinical launch. It shows whether the next oncology product arrives on the schedule management repeated on 5 November 2026.
- 1 January 2027: EviCore Shield coverage takes effect. It is the second benefits-manager start date behind the company's claim of more than 80% of eligible lives covered.
- ~18 February 2027 (est.): Fourth-quarter 2026 report and 2027 guidance. It settles whether screening revenue lands inside $233–238 million and whether new coverage is turning into tests at an acceptable selling price.
What would change the view
A daily close above $185.31, close to the late-October closing highs, which would show the shares leading the S&P 500 again. A 2026 screening revenue result above the $238 million top of the current guide would also show the shares leading.
What it trades with
The recent drivers are specific to Guardant: the 14 October 2026 and 4 November 2026 patent outcomes, the 5 November 2026 cash guidance and the 12 November 2026 note pricing apply to no peer. Natera and Tempus AI are the closest comparisons among loss-making diagnostics companies; a fall in both while revenue estimates hold would point to a sector valuation move. Convertible-note buyers commonly hedge by shorting the underlying shares, a view that would show up as heavier trading volume around the 16 November 2026 settlement.
Quest Diagnostics is both a Shield distribution partner and a competing lab, so its comments on Shield blood-draw volume bear directly on the screening forecast.
The evidence, claim by claim (8)
- Q3 2026 screening revenue was $67.6 million, up 180%, on 83,000 Shield tests, up 246%; total revenue was $361.0 million, up 36%. Guardant Health Q3 2026 8-K exhibit 99.1 · as of
- 2026 guidance rose to revenue of $1.36–1.37 billion, screening revenue of $233–238 million and 285,000–290,000 Shield tests. Guardant Health Q3 2026 8-K exhibit 99.1 · as of
- 2026 free cash flow burn guidance rose to $205–220 million from $195–205 million; Q3 free cash flow was $(37.2) million and cash was $1.1 billion at quarter-end. Guardant Health Q3 2026 8-K exhibit 99.1 · as of
- Shield cost per test was $330 in Q3, down from $410 in Q2; average selling price was above $800, with management citing a $700 floor. Guardant Health Q3 2026 earnings call · as of
- Guardant priced $500 million of 0% convertible senior notes due 2032 at a $208.95 conversion price, a 35.0% premium to the $154.78 last sale price; about $501.7 million repurchases about $395.2 million of 2027 notes and $51.7 million funds capped calls with a $309.56 cap price. Guardant Health pricing announcement, reported by Investing.com · as of
- A US Patent and Trademark Office notice confirmed all 23 claims of TwinStrand's '631 patent, according to TwinStrand. TwinStrand Biosciences press release · as of
- The Delaware final judgment carries a 6% ongoing royalty on 11 covered Guardant products through 15 March 2033, according to TwinStrand. TwinStrand Biosciences press release · as of
- Piper Sandler maintained its Overweight rating on Guardant Health and lowered its price target to $190. Company news, Piper Sandler · as of
Sources
- Guardant Health prices $500 million convertible notes offering · investing.com ·
- Stockhouse ·
- Guardant Health, Inc. - Form 8-K - FY2026 · sec.gov ·
- Guardant Health (GH) Q3 2026 Earnings Call Transcript · fool.com ·
- TwinStrand Biosciences Announces USPTO Confirmation of Patentability of Core Duplex Sequencing Patent · biospace.com
- TwinStrand Biosciences Announces Second U.S. Patent Trial and Appeal Board Decision Upholding All Claims of TwinStrand's '127 Patent · businesswire.com ·
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