Veracyte Stock Surges 30.9% in a Year: What's Driving the Rally?

Veracyte’s VCYT shares have surged 30.9% in the past year, showing impressive momentum. It has significantly outperformed the industry’s 13.1% decline and the S&P 500 composite’s 12.1% gain.  

Presently carrying a Zacks Rank #3 (Hold), the global diagnostics company continues to benefit from the robust performance of Afirma and Decipher tests. Their solid future growth potential, along with strategic investment in the long-term growth drivers, is highly promising.

Based in San Francisco, CA, Veracyte offers advanced genomic tests that combine deep scientific, clinical and machine-learning expertise with other capabilities. These aid in improving diagnostic, prognostic and treatment decisions for cancer and other challenging diseases, helping patients avoid unnecessary procedures and speeding up treatment decisions. In the United States, Veracyte provides tests through its central laboratories while expanding global access by partnering with local labs.

Key Catalysts for VCYT’s Growth

The rally in the company’s share price can be linked to the strength of both Afirma and Decipher Prostate tests. In the first quarter of 2025, Afirma test volumes grew 10%, resulting in approximately 15,500 tests. A majority of this growth was driven by deeper penetration into existing accounts, as well as the addition of sizable new customers. Additionally, the research-use-only (RUO) Afirma GRID data is driving strong interest from the KOL (key opinion leaders) and academic community, aiming to help Veracyte expand into the endocrinology market.

Meanwhile, the latest launch of Decipher in the metastatic population and the upcoming launch of the Prosigna LDT are expected to drive sustainable long-term growth. Decipher has seen remarkable adoption and delivered record volume growth of 37% year over year, resulting in nearly 22,600 tests and 33% revenue growth in the first quarter of 2025. The company experienced broad-based expansion across each biopsy NCCN risk category, from low-risk to intermediate-risk and high-risk, in the first quarter.

Moreover, Veracyte is expanding the test to cover the entire prostate cancer risk spectrum. With key approvals secured and commercialization efforts underway, the company is preparing to launch into this expanded population in the first half of 2025, with test volumes expected to rise later in the year. Among its long-term growth drivers, Veracyte is committed to launching its test as IVD (in-vitro diagnostics) to address patient needs outside the United States, as well as innovations like the Percepta Nasal Swab test to tackle new cancer challenges. The company is also working on the first indication of its MRD (minimal residual disease) platform for muscle-invasive bladder cancer, leveraging the strong Decipher channel.

Risks for VCYT

Veracyte’s operations are susceptible to macroeconomic challenges, such as ongoing interest rate increases and inflation in the United States and global markets, as well as turmoil in the global banking and finance system, among others. Further, ongoing geopolitical uncertainties and supply disruptions can potentially hamper its profitability.

A Glance at VCYT’s Estimates

In the past 30 days, the Zacks Consensus Estimate for the company's 2025 earnings per share (EPS) has moved 18.5% north to $1.28. Revenues are projected to grow 10.7% to $493.3 million in 2025, while the same for 2026 is expected to reach $542.8 million (up 10%).  

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, STERIS STE and Cardinal Health CAH. 

Phibro Animal Health has an estimated long-term earnings growth rate of 26.2% compared with the industry’s 15.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 30.6%. Its shares have surged 34.5% compared with the industry’s 8.9% growth in the past year.

PAHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STERIS, carrying a Zacks Rank #2 at present, has an earnings yield of 4.3% compared with the industry’s -2.7%. Shares of the company have rallied 40% compared with the industry’s 8.9% growth. STE’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 0.6%.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 11.8% for fiscal 2026 compared with the industry’s 9.8%. Shares of the company have rallied 52.6% against the industry’s 4.1% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.

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

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