GH - Guardant Health: Shield Launch Could Drive Multiple Expansion

2024-03-22 13:31:40 ET

Summary

• GH can prove to the market they have a competitive product in Shield that can gain a foothold in the roughly 50m unscreened CRC patient population.
• Shield's strongest adherence rate, with the potential for on-par sensitivity submission within 18 months will drive adoption.
• Currently trading over 1.5 STD below historical discount to Exact Sciences (EXAS), their main comp.
• Multiple mean reversion to the comp average could drive a 30% upside if they can gain FDA approval in June and show strong launch numbers in 2H24 to start to get credit for Shield.
• A worst-case Shield denial and killing of the product is actually cash flow accretive to the story and could provide an upside after the news is digested.

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