UPDATE: Cantor Fitzgerald Starts Veracyte, Inc (VCYT) at Buy

(Updated - December 18, 2015 10:02 AM EST)

Cantor Fitzgerald initiated coverage on Veracyte, Inc (NASDAQ: VCYT) with a Buy rating and a price target of $13. Analyst Bryan Brokmeier sees Afirma GEC growth and he doesn't think the company's product pipeline is reflected in the stock's valuation.

Brokmeier explained, "VCYT is a commercial-stage molecular diagnostics company whose industry-leading Afirma Thyroid Gene Expression Classifier (GEC) is becoming a new standard of care. The Afirma GEC has provided the company with a strong industry reputation and a base business, which it can leverage to launch additional molecular diagnostic tests. In the near term, revenues should be driven by the Afirma GEC as it continues to expand reimbursement and market penetration. In the long term, we believe VCYT’s focus on molecular diagnostics that improve patient care and reduce healthcare costs positions the company to be a leader in the cancer diagnostics market."

The analyst added, "We estimate that in 2016 there are approximately 110,000 indeterminate FNAs in the U.S., which, based on a $3,000 ASP translates into an $800M addressable market. Given VCYT’s market leadership, the proven clinical utility and cost-effectiveness of Afirma and the Genzyme partnership, we believe that the company can capture 400-600bps of the indeterminate FNA market for each of the next five years, including a 24% market share in 2016."

For an analyst ratings summary and ratings history on Veracyte, Inc click here. For more ratings news on Veracyte, Inc click here.

Shares of Veracyte, Inc closed at $7.10 yesterday.

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