Diagnostics company Guardant Health (NASDAQ: GH) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 48.3% year on year to $301.7 million. The company’s full-year revenue guidance of $1.31 billion at the midpoint came in 3.1% above analysts’ estimates. Its non-GAAP loss of $0.45 per share was 5% above analysts’ consensus estimates.

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Company Overview

Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ: GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Guardant Health grew its sales at an exceptional 29.4% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Guardant Health’s annualized revenue growth of 33.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Guardant Health reported magnificent year-on-year revenue growth of 48.3%, and its $301.7 million of revenue beat Wall Street’s estimates by 8.4%.

Looking ahead, sell-side analysts expect revenue to grow 25.4% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and indicates the market is forecasting success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.

Guardant Health’s high expenses have contributed to an average adjusted operating margin of negative 51% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Guardant Health’s adjusted operating margin rose by 46.9 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 28.5 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

Guardant Health’s adjusted operating margin was negative 39.2% this quarter.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although Guardant Health’s full-year earnings are still negative, it reduced its losses and improved its EPS by 12% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.

In Q1, Guardant Health reported adjusted EPS of negative $0.45, up from negative $0.49 in the same quarter last year. This print beat analysts’ estimates by 5%. Over the next 12 months, Wall Street expects Guardant Health to improve its earnings losses. Analysts forecast its full-year EPS of negative $1.78 will advance to negative $1.40.

Key Takeaways from Guardant Health’s Q1 Results

We were impressed by how significantly Guardant Health blew past analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance trumped Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 6.5% to $98.50 immediately after reporting.

Guardant Health had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).