Veracyte Stock Gains on Q1 Earnings and Revenue Beat, Gross Margin Up

Veracyte, Inc. VCYT delivered first-quarter 2025 earnings of 31 cents per share, which marked a stupendous improvement of 63.2% from the year-ago period’s figure of 19 cents. The bottom line beat the Zacks Consensus Estimate by 55%.

The company-adjusted earnings per share (EPS) were 9 cents compared to the year-ago period’s loss of 2 cents per share. 

Following the earnings announcement, VCYT’s share price gained 1.2% yesterday. 

VCYT’s Q1 Revenues

Revenues increased 18.3% year over year to $114.5 million, which outpaced the Zacks Consensus Estimate by 3.2%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

VCYT’s Q1 Segmental Details

Testing revenues totaled $107.3 million, up 19% year over year. This rise was mainly due to Decipher and Afirma revenue growth of 33% and 6%, respectively. Testing volume improved 23% year over year to 38,078 tests.

Product revenues rose 1% year over year to $3.6 million in the first quarter. Volume was approximately 2,570 tests, up 1% year over year. 

Biopharmaceutical and other revenues of $3.6 million reflected a 19% increase from the prior-year quarter’s figure. 

Margins

The total cost of revenues (product, testing, biopharmaceutical and other) was $35 million, up 1.7% year over year.

The gross profit rose 27.3% to $79.5 million. The gross margin expanded 495 basis points (bps) to 69.5%.

Selling and marketing expenses rose 2.8% to $24.4 million, while general and administrative expenses increased 29% to $33.8 million. R&D expenses totaled $17.7 million, up 11% year over year. The company delivered an operating profit of $3.5 million compared to a loss of $3.5 million in the year-ago period. 

VCYT’s Cash, Capital Structure and Solvency

Veracyte exited first-quarter 2025 with cash and cash equivalents of $186.1 million compared with $239.1 million at the end of the fourth quarter of 2024.

The net cash provided from operating activities at the end of the reported quarter was $5.4 million against $9 million net cash used in operating activities a year ago.

Guidance

Veracyte reaffirmed its full-year 2025 testing revenue guidance. The company expects testing revenues to be in the range of $470-$480 million, implying 12-15% year-over-year growth. 

Henry Schein, Inc. Price, Consensus and EPS Surprise

Henry Schein, Inc. price-consensus-eps-surprise-chart | Henry Schein, Inc. Quote

The company raised guidance for adjusted EBITDA as a percentage of revenues. It is anticipated to be approximately 22.5% (up from the previous guidance of 21.6%). 

Our Take

Veracyte reported better-than-expected first-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. Meanwhile, the growth in Product revenues and Biopharmaceutical and other revenues was encouraging. The gross margin expansion instills optimism among investors. 

In the first quarter, the company had some notable developments, including the launch of Decipher for metastatic prostate cancer patients. It also published analytical validity data for the Percepta Nasal Swab. 

Zacks Rank and Other Key Picks

Veracyte currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks from the broader medical space are AngioDynamics ANGO, Integer Holdings Corporation ITGR and Boston Scientific BSX. 

AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a loss of 13 cents. Revenues of $72 million beat the Zacks Consensus Estimate by 2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 70.9%.

Integer Holdings, sporting a Zacks Rank #1 at present, posted a first-quarter 2025 adjusted EPS of $1.31, which outpaced the Zacks Consensus Estimate by 3.1%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%.

ITGR has an estimated long-term earnings growth rate of 20.8% compared with the industry’s 14.3%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 2.8%.

Boston Scientific, currently carrying a Zacks Rank #2, reported a first-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion topped the Zacks Consensus Estimate by 2.3%.

BSX has an estimated 2025 earnings growth rate of 15.9% compared with the S&P 500 composite’s 11.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.

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

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