We recently published a list of 10 Best Performing Mid Cap Stocks to Buy According to Analysts. In this article, we are going to take a look at where Guardant Health, Inc. (NASDAQ:GH) stands against other best performing mid cap stocks to buy according to analysts.
On February 7, Simeon Hyman, Global Investment Strategist at ProShares Advisors, appeared on CNBC to discuss the upcoming jobs report and its expected impact on the market. He believes that the market will hold up, and particularly cites mid-cap stocks as an optimal balance for risk and return. He noted that the economy has shown strength in various sectors, such as the ISM manufacturing index, which recently beat expectations. This broadening of economic growth suggests that the jobs numbers might be decent. Hyman also highlighted the positive earnings growth in the S&P 500, with about three-quarters of companies reporting a 12% year-over-year increase, which is encouraging news.
Recently, the mega-cap tech stocks have shown some weakness despite the overall market being on pace for a winning week. Hyman observed that while this broadening of market performance is positive, it also indicates risk, given that the tech sector still accounts for over 30% of the S&P 500 and remains in the red for the year. His word of the day was mid-caps, which he believes are historically the sweet spot in the market. Mid-caps have outperformed both large and small-cap stocks over the decades. Currently, mid-caps are undervalued, offering investors about $0.50 on the dollar, a situation that hasn’t occurred with small caps despite their underperformance. The key advantage of mid-caps is their earnings growth, which sets them apart from small-caps. When discussing mid-caps versus small caps, Hyman highlighted that mid-caps also have a strong domestic focus, with about 75% of their revenues coming from domestic sources. This is similar to small caps but with a crucial difference: mid-caps generally offer higher quality than small caps, lacking the losses and negative earnings often seen in small-cap companies. This makes mid-caps an attractive option for investors looking for stable growth.
Methodology
We used the Finviz stock screener to compile a list of the best-performing mid-cap stocks that were trading between $2 billion and $10 billion. We then picked the top 10 stocks with year-to-date gains higher than 20% and an average upside potential of over 25%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Note: All data is as of February 24.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Analysing a blood sample, a technician in a lab coat using precision diagnostic equipment.
Guardant Health, Inc. (NASDAQ:GH)
Year-to-Date Performance as of February 24: 39.74%
Upside Potential as of February 24: 31.15%
Number of Hedge Fund Holders: 40
Guardant Health, Inc. (NASDAQ:GH) is a precision oncology company that specializes in liquid biopsies and advanced analytics. It offers tests and platforms to detect, monitor, and inform treatment decisions for cancer patients. It uses AI and extensive data to drive advancements in personalized cancer care.
The company’s therapy selection, driven by Guardant360, is a key revenue generator. Guardant360 is a liquid biopsy test that analyzes circulating tumor DNA in the bloodstream to identify genomic alterations in advanced solid tumors. This aids in personalized cancer treatment decisions. In Q4 2024, clinical revenue grew 34% year-over-year. Guardant360 volumes saw double-digit growth in 2024 and contributed to a 24% increase in Q4 clinical test volumes. Guardant360’s average selling price reached $3,000 in Q4 2024, ahead of the 2028 target, due to Medicare rate increases and improved commercial collections. The upgraded Guardant360 Liquid enhances gene coverage and sensitivity on the Smart Liquid Biopsy platform, which drives increased test frequency.
In mid-January, Guardant Health, Inc. (NASDAQ:GH) entered a collaboration with ConcertAI, where it’s using AI to integrate patient electronic medical record (EMR) data with tumor profiling to create a real-world data solution for biopharma partners. This is to enhance disease biology interpretation, identify tumor evolution mechanisms, and improve cancer treatment development through advanced data and AI analytics.
Overall, GH ranks 7th on our list of best performing mid cap stocks to buy according to analysts. While we acknowledge the growth potential of GH as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
