CDNA Stock Risk & Deep Value Analysis
CareDx Inc
Healthcare • Diagnostics & Research
DVR Score
out of 10
What You Need to Know About CDNA Stock
We analyzed CareDx Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran CDNA through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
CDNA Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk is the company's inability to return to consistent profitability and positive free cash flow, despite a strong balance sheet. Persistent losses and cash burn would necessitate further capital raises, potentially leading to significant shareholder dilution, or could severely restrict strategic investments needed to fend off competition and achieve growth.
Risk Matrix
Overall
Aggressive
Financial
High
Market
Medium
Competitive
High
Execution
High
Regulatory
Medium
Red Flags
- ⚠
Significant Q4 2025 EPS miss by 47.83% and YoY decline.
- ⚠
Negative TTM P/E of -46.44x and TTM EBITDA of -$2.64M, indicating ongoing unprofitability.
- ⚠
Lack of transparency on free cash flow and detailed margin trends.
- ⚠
Previous analysis noted an 'eroding competitive moat' and 'intense competition' with no new positive updates.
- ⚠
Previous analysis mentioned 'ongoing legal battles' with no updates on resolution.
Upcoming Risk Events
- 📅
Continued EPS misses or declining revenue growth in upcoming quarters
- 📅
Increased competitive pressure from rivals in transplant diagnostics
- 📅
Adverse outcomes in existing or new legal challenges
When to Reconsider
- 🚪
Exit if quarterly revenue consistently declines below the current $86M-$95M range.
- 🚪
Sell if the company announces significant share dilution to fund operations or acquisitions.
- 🚪
Exit if key competitive products gain substantial market share, further eroding CareDx's position.
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What Does CareDx Inc (CDNA) Do?
Market Cap
$937.77M
Sector
Healthcare
Industry
Diagnostics & Research
Employees
644
CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. It provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company offers Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; Allocell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants; and XynQAPI, a transplant quality tracking software, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.
Visit CareDx Inc WebsiteInvestment Thesis
CareDx presents a speculative turnaround opportunity in the specialized transplant diagnostics market, underpinned by a strong balance sheet and essential diagnostic products. The investment thesis relies on the company's ability to navigate intense competitive pressures, stabilize its revenue trajectory, and ultimately return to sustainable profitability and positive cash flow, potentially resolving its legal entanglements and demonstrating an expanding competitive moat. The current valuation reflects significant challenges, offering potential upside if a successful pivot or recovery strategy is executed.
Is CDNA Stock Undervalued?
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CDNA Price Targets & Strategy
12-Month Target
$25.92
Bull Case
$30.00
Bear Case
$15.00
Valuation Basis
Based on 3.5x forward P/S applied to $381.5M est. FY26 Revenue (annualized Q1 2026 forecast).
Entry Strategy
Dollar-cost average between $17.00-$19.00, acknowledging current price is within this range.
Exit Strategy
Consider profit-taking if it approaches $28-$30; set a stop loss around $15.00 if fundamental issues worsen.
Portfolio Allocation
1-3% for aggressive risk tolerance, given the turnaround nature and high uncertainty.
Price Targets & Strategy
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Is CDNA Financially Healthy?
Valuation
P/E Ratio
15.00
Forward P/E
19.31
Price/Book
2.47
Price/Sales
2.42
Profitability
Gross Margin
66.91%
Operating Margin
-12.51%
Net Margin
17.06%
Return on Equity
19.64%
EPS
$1.00
Balance Sheet
Current Ratio
2.86
Debt/Equity
0.09
Cash Flow
EBITDA
-$2.64M
Other
Beta (Volatility)
1.15
Does CDNA Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Eroding
Moat Sources
2 Identified
The moat is vulnerable to erosion from new, more accurate, or cost-effective diagnostic technologies emerging from competitors, as well as the expiration of key patents. The intense competitive landscape puts continuous pressure on pricing and innovation.
Moat Erosion Risks
- •Aggressive R&D and market entry by larger, well-funded competitors.
- •Adoption of alternative or superior diagnostic methods by healthcare providers.
- •Loss of key intellectual property protections through legal challenges or patent expiry.
CDNA Competitive Moat Analysis
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CDNA Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (No specific data available to gauge strong sentiment, likely overshadowed by financial performance and market noise.)
Institutional Sentiment
Neutral/Unclear (Analyst consensus and ratings unavailable. Vanguard's 13G/A shows 0% due to internal realignment, not indicative of sentiment.)
Insider Activity (Form 4)
President & CEO Hanna John Walter JR withheld 35,037 shares ($626K) for tax on RSU vesting. CFO & COO Keith Kennedy withheld 11,725 shares ($210K). CCO Jessica Meng withheld 7,386 shares ($132K). Secretary & GC Jeffrey Adam Novack withheld 3,987 shares ($71K). Director Michael Goldberg was granted 1,981 shares (automatic quarterly compensation). All observed activity is routine, with no open-market buys or sells.
Options Flow
Normal options activity (No specific unusual options flow data was provided for analysis).
Earnings Intelligence
Next Earnings
2026-04-29
Surprise Probability
Medium (Company significantly missed last quarter's EPS estimate. While Q1 2026 revenue is forecast higher, consistent EPS delivery is a concern.)
Historical Earnings Pattern
Volatile due to turnaround nature; likely sensitive to any major misses or positive guidance on profitability and competitive positioning.
Key Metrics to Watch
Competitive Position
Top Competitor
Unavailable from provided data.
Market Share Trend
Losing (Previous analysis cited 'eroding competitive moat' and 'intense competition,' implying market share loss or stagnation).
Valuation vs Peers
Unavailable from provided data (sector median comparisons missing).
Competitive Advantages
- •Intangible Assets/IP (Patents and proprietary technology in transplant diagnostics)
- •Switching Costs (Physician reliance on specific diagnostic tests and protocols)
Market Intelligence
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What Could Drive CDNA Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Report on 2026-04-29
Medium-Term (6-18 months)
- •Potential stabilization of revenue trends and return to positive operating cash flow (if achieved)
- •Resolution of competitive pressures or legal disputes (no specific timeline)
Long-Term (18+ months)
- •Successful product innovation or market expansion within transplant diagnostics (no specific plan identified)
- •Demonstrated ability to achieve and sustain profitability
Catalysts & Growth Drivers
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What's the Bull Case for CDNA?
- ✓
Consistent quarter-over-quarter revenue growth acceleration.
- ✓
Clear pathway and execution towards sustained positive free cash flow.
- ✓
Announcements of new strategic partnerships or significant product pipeline advancements.
- ✓
Positive resolution of legal disputes or competitive landscape stabilization.
Bull Case Analysis
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Competing with CDNA
See how CareDx Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
CareDx Inc CDNA | $937.8M | 1.9 | 15.0 | $379.8M | 17.1% | 0.0% | |
AbbVie Inc ABBV | $403.8B | 0.1 | 171.8 | — | — | — | Compare → |
Johnson & Johnson JNJ | — | 1.0 | — | — | — | — | Compare → |
Eli Lilly and Co LLY | $965.0B | 0.5 | 52.6 | — | — | — | Compare → |
Pfizer Inc PFE | $161.1B | 0.2 | 20.2 | $17.6B | 12.4% | -1.7% | Compare → |
UnitedHealth Group Inc UNH | $300.6B | 0.5 | 17.3 | — | — | — | Compare → |
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How CareDx Inc Makes Money
CareDx Inc operates in the highly specialized field of transplant diagnostics. The company develops and commercializes non-invasive diagnostic tests that help monitor the health of transplanted organs, such as kidneys, hearts, and lungs. By providing critical genetic and molecular information, these tests assist clinicians in detecting potential organ rejection early, allowing for timely intervention and improving patient outcomes. Their business model primarily revolves around providing these recurring testing services to transplant centers, hospitals, and physicians globally.
Read Full Business Model BreakdownFAQ
What is the DVR Score for CareDx Inc (CDNA)?
As of April 6, 2026, CareDx Inc has a DVR Score of 1.9 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of CareDx Inc?
CareDx Inc's market capitalization is approximately $937.8M. The company operates in the Healthcare sector within the Diagnostics & Research industry.
What ticker symbol does CareDx Inc use?
CDNA is the ticker symbol for CareDx Inc. The company trades on the NGM.
What is the risk level for CDNA stock?
Our analysis rates CareDx Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of CDNA?
CareDx Inc currently has a price-to-earnings (P/E) ratio of 15.0. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is CareDx Inc's revenue growing?
CareDx Inc has reported revenue growth of 0.0%. Revenue has been declining, which warrants closer examination.
Is CDNA stock profitable?
CareDx Inc has a profit margin of 17.1%. The company is profitable but margins are modest.
How often is the CDNA DVR analysis updated?
Our AI-powered analysis of CareDx Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 6, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for CDNA (CareDx Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.