Guardant Health Delivers Strong Top-Line Growth in Q4; Shares Still Cheap

Guardant Health delivered decent fourth-quarter and full-year results. Although top-line growth was strong, margins remained compressed relative to the prior year, and the firm's 2023 revenue outlook came in slightly below our projections. Nevertheless, at first glance we are maintaining our $63 fair value estimate due to our assumptions around the company's long-term prospects in early cancer detection, and we continue to believe the shares are significantly undervalued. Our moat rating remains none on this early-stage company, but we are still optimistic about Guardant's liquid biopsy pipeline for early cancer detection. Up first, Shield still has the potential to be the first Food and Drug Administration-approved, Medicare-reimbursed blood test for colorectal cancer screening, which is reflected in our positive moat trend rating.