Veracyte Inc. Common Stock (VCYT)

FairStock Score: 49/100 — MIXED

Key Financials

Strengths

• Generates $87 million in annual free cash flow (3.4% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Conservative balance sheet with debt-to-equity of just 0.03, providing financial flexibility
• Altman Z-Score of 16.0 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 18.6% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($17) with negative 84% margin of safety—limited downside protection

AI Analysis

Veracyte Inc. Common Stock is a small-cap healthcare company valued at $2.5 billion. The business generates $517 million in annual revenue with a 8.0% net margin and $87 million in free cash flow. From a quality standpoint, Veracyte shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and Altman Z-Score of 16.0 confirms fortress-level solvency. On valuation, the stock is commanding a steep 40.4x multiple, with trades above its Graham Number with a negative 84% margin. Growth dynamics show revenue growing at 18.6% and profit growth of 704.8%. Our composite FairStock Score of 49/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Veracyte's 19% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $87 million in annual free cash flow (3.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 40x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer