Value
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 7.8 |
| Fwd P/E | 4.9 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 25.6x
- ▸PEG: 0.03
CDNA · Why this verdict
Why CareDx (CDNA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company is FCF-positive despite a GAAP loss, with a 17% FCF margin and a 4.7% FCF yield, and it passes the engine's Rule of 40 test with a score of 56. Quality breakdown | The Rule of 40 score should stay above 40 and FCF margin should hold above 10% over the next 4 quarters. | →Stable |
| CounterA Rule of 40 pass driven mostly by high revenue growth can mask a still-unprofitable core business on a GAAP basis, and growth could decelerate faster than margins improve. | ||
Revenue growth is running at 39% year-over-year, pushing the engine's growth score to a maximum 10.0. Growth breakdown | Revenue growth should stay above 25% YoY over the next 4 reported quarters to sustain this pillar. | →Stable |
| CounterGrowth this strong in a diagnostics testing company can decelerate sharply as reimbursement dynamics or test volume normalize off a smaller comparison base. | ||
Insiders have sold $1,836,505 (0.122% of market cap) across 8 transactions in the past 90 days with zero buys, producing a bearish insider signal. Insider | Insider selling should slow to fewer than 4 transactions per quarter with net value sold below $1,000,000 if confidence is stabilizing. | →Stable |
| CounterBroad-based selling spread across many transactions can reflect routine, pre-scheduled selling plans (Rule 10b5-1) among a diversified insider base rather than a coordinated signal of eroding confidence. | ||
RSI at 72 signals an overbought condition even as on-balance volume is falling, a divergence that softened the momentum score to 5.4, just below the engine's 5.5 threshold. Momentum breakdown | RSI should cool into the 40-60 range without a price breakdown of more than 10% over the next month if the advance has genuine support. | →Stable |
| CounterOverbought readings in high-growth healthcare names can persist for extended periods when a strong growth narrative is driving continued buying, regardless of short-term volume divergences. | ||
The company is FCF-positive despite a GAAP loss, with a 17% FCF margin and a 4.7% FCF yield, and it passes the engine's Rule of 40 test with a score of 56.
→StableQuality breakdown
- Expectation
- The Rule of 40 score should stay above 40 and FCF margin should hold above 10% over the next 4 quarters.
CounterA Rule of 40 pass driven mostly by high revenue growth can mask a still-unprofitable core business on a GAAP basis, and growth could decelerate faster than margins improve.
Revenue growth is running at 39% year-over-year, pushing the engine's growth score to a maximum 10.0.
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 25% YoY over the next 4 reported quarters to sustain this pillar.
CounterGrowth this strong in a diagnostics testing company can decelerate sharply as reimbursement dynamics or test volume normalize off a smaller comparison base.
Insiders have sold $1,836,505 (0.122% of market cap) across 8 transactions in the past 90 days with zero buys, producing a bearish insider signal.
→StableInsider
- Expectation
- Insider selling should slow to fewer than 4 transactions per quarter with net value sold below $1,000,000 if confidence is stabilizing.
CounterBroad-based selling spread across many transactions can reflect routine, pre-scheduled selling plans (Rule 10b5-1) among a diversified insider base rather than a coordinated signal of eroding confidence.
RSI at 72 signals an overbought condition even as on-balance volume is falling, a divergence that softened the momentum score to 5.4, just below the engine's 5.5 threshold.
→StableMomentum breakdown
- Expectation
- RSI should cool into the 40-60 range without a price breakdown of more than 10% over the next month if the advance has genuine support.
CounterOverbought readings in high-growth healthcare names can persist for extended periods when a strong growth narrative is driving continued buying, regardless of short-term volume divergences.
TrendMatrix Research · core thesis
Engine thesis — one sentence
CareDx combines strong revenue growth and a Rule of 40 pass backed by positive free cash flow, but notable insider selling, an overbought momentum reading, and a below-floor risk score flagged by the engine argue for a cautious stance despite the growth story.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 9.8 |
| Op margin | 0.6 |
| Net margin | 0.0 |
| Current ratio | 9.6 |
| FCF quality | 6.9 |
| Moat | 7.2 |
| Rule of 40 | 9.0 |
| Piotroski F | 8.9 |
- ▸FCF-positive despite GAAP loss (FCF margin 17%, FCF yield 4.7%)
- ▸Rule of 40: 56 (pass)
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 39% YoY
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.1 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 7.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.5 |
| Price target | 5.1 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
Insider
3.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.5 |
- ▸Notable insider selling — $1,836,505 (0.122% of mkt cap)
Peer rank
6.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.3 |
| quality rank | 3.8 |
| growth rank | 8.8 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 2.9 |
| 52w position | 8.4 |
| gap | 6.0 |
Risk (lower is worse)
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.8 |
| days to cover | 0.0 |
| volatility | 0.0 |
| put call | 8.6 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 1.9 |
| debt equity | 9.7 |
- ▸High short interest justified: 17%
- ▸High IV: 122%
- ▸Above max pain $18
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:29d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.81
Upside
-12.2%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.43>1.3, MCap $1.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.9>=5.5. Top dim: Growth at 10.0; weakest: Risk (lower is worse) at 3.1. No conviction either direction.
The strongest dimensions are Growth at 10.0, Peer rank at 6.9, and Value at 6.7; the weakest are Risk (lower is worse) at 3.1, Insider at 3.5, and Technical at 5.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.81 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Rule Of 40 Pass With Positive Fcf
Trip ifRule of 40 score falls below 40.
- P2Strong Revenue Growth Profile
Trip ifRevenue growth falls below 20% YoY for 2 consecutive quarters.
- P3Notable Insider Selling Pressure
Trip ifNet insider selling exceeds $3,000,000 over the next 90 days.
- P4Overbought Momentum Near Highs
Trip ifPrice falls more than 10% within the next month while RSI stays above 65.