VCYT Stock Gains on Q3 Earnings and Revenue Beat, '25 View Up

Veracyte, Inc. VCYT delivered third-quarter 2025 adjusted earnings of 51 cents per share, which marked a stupendous improvement of 54.5% from the year-ago period’s figure of 33 cents. The bottom line beat the Zacks Consensus Estimate by 59.4%.

The company’s GAAP earnings per share (EPS) were 24 cents compared with the year-ago period’s earnings of 19 cents per share.

VCYT’s Q3 Revenues

Revenues increased 13.8% year over year to $131.9 million, which outpaced the Zacks Consensus Estimate by 5.5%.

Following the earnings announcement, VCYT’s share price gained 27.5% last Wednesday. 

VCYT’s Q3 Segmental Details

Testing revenues totaled $127.8 million, up 17% year over year. This rise was mainly due to Decipher and Afirma revenue growth of 26% and 7%, respectively. Testing volume improved 19% year over year to 43,679 tests.

Product revenues rose 4% year over year to $3.3 million.

Biopharmaceutical and other revenues of $0.8 million reflected a 74.2% decrease from the prior-year quarter’s figure.

Margins

The total cost of revenues (product, testing, biopharmaceutical and other) was $37.9 million, up 11.6% year over year.

The gross profit rose 14.7% to $94 million. The gross margin expanded 56 basis points (bps) to 71.3%.

Selling and marketing expenses rose 8.1% to $24.5 million, while general and administrative expenses increased 6% to $27.3 million. R&D expenses totaled $16 million, down 9.1% year over year. The adjusted operating margin was 19.9%, which expanded 612 bps year over year.

VCYT’s Cash, Capital Structure and Solvency

Veracyte exited third-quarter 2025 with cash and cash equivalents of $315.6 million compared with $219.5 million at the end of the second quarter.

The cumulative net cash provided from operating activities at the end of the reported quarter was $83.7 million compared with $50.6 million a year ago.

VCYT’s Raised 2025 Guidance

Veracyte raised its full-year 2025 testing revenue guidance. The company expects testing revenues to be in the range of $484-$487 million (up from $477-$483 million).  Adjusting for the impact of the paused Envisia test, the guidance implies 17% to 18% year-over-year testing revenue growth.

The company also raised full-year 2025 total revenue guidance to $506-$510 million (up from $496-$504 million), implying 14% year-over-year growth. The Zacks Consensus Estimate for the metric is currently pegged at $508.3 billion.

Veracyte, Inc. Price, Consensus and EPS Surprise

Veracyte, Inc. price-consensus-eps-surprise-chart | Veracyte, Inc. Quote

The company raised guidance for adjusted EBITDA as a percentage of revenues. It is anticipated to be over 25% (up from the previous guidance of 23.5%).

Our Take

Veracyte reported better-than-expected third-quarter results, with its earnings and revenues surpassing their respective estimates. The company registered robust growth from its market-leading Decipher Prostate and Afirma tests. However, the decline in Biopharmaceutical and other revenues was discouraging.

Both margin expansion instills optimism among investors. 

In the third quarter, the company had some notable developments, including the launch of Afirma v2 transcriptome to improve the efficiency of the Afirma testing business. Also, Veracyte completed NIGHTINGALE clinical utility trial enrollment for the Percepta Nasal Swab test.

Zacks Rank and Other Key Picks

Veracyte currently carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the broader medical space are Medpace Holdings MEDP, IDEXX Laboratories IDXX and Boston Scientific BSX.

Medpace, currently sporting a Zacks Rank #1, reported third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.

MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company beat on earnings in each of the trailing four quarters, the average surprise being 14.28%.

IDEXX, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $3.40, which exceeded the Zacks Consensus Estimate by 8.3%. Revenues of $1.11 billion topped the Zacks Consensus Estimate by 3.2%.

IDXX has an estimated historical earnings growth rate of 14.9% compared with the industry’s 10.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 6.08%.

Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.

BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.

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This article originally published on Zacks Investment Research (zacks.com).

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