CareDx Soars 19.8% on Explosive Q4 Earnings: What’s Fueling the Surge?

Summary
• CareDx (CDNA) surges 19.8% intraday, trading at $20.53 after a $17.95 open
• Preliminary Q4 revenue hits $108M, up 25% YoY, with testing services and patient solutions driving growth
• Share repurchases of $12M in Q4 signal management confidence
• Intraday range spans $17.74 to $20.59, reflecting sharp volatility. The stock’s meteoric rise follows a blockbuster earnings report and aggressive buybacks, positioning it as a focal point for traders and investors navigating the healthcare equipment sector’s mixed performance.

Q4 Revenue Surge and Strategic Buybacks Ignite Momentum
CareDx’s 19.8% intraday rally stems from its preliminary Q4 2025 results, which revealed 25% year-over-year revenue growth to $108 million. Testing services revenue surged 23% to $78 million, while patient and digital solutions revenue jumped 47% to $17 million. The company also announced $12 million in share repurchases during the quarter, averaging $15.79 per share. These actions, coupled with full-year 2025 revenue guidance of $380 million, underscore management’s confidence in the business’s scalability and profitability, directly fueling the stock’s sharp rebound.

Healthcare Equipment Sector Splits as Medtronic Drags
While CareDx’s stock soars, the broader Healthcare Equipment & Supplies sector remains mixed. Medtronic (MDT), the sector’s largest player, trades down 0.91% intraday, reflecting caution in capital-intensive medtech stocks. However, CareDx’s precision medicine focus—particularly in transplant diagnostics—positions it as a growth outlier amid sector-wide caution. The divergence highlights investor appetite for high-growth, niche healthcare innovators over established but slower-moving peers.

Options Playbook: Leveraging Volatility and Technicals
• 200-day average: $16.35 (below current price)
• RSI: 32.36 (oversold)
• MACD: 0.007 vs. signal line 0.381 (bearish crossover)
• Bollinger Bands: $20.94 (upper), $19.26 (middle), $17.57 (lower)
• Key support/resistance: 30D support at $18.85, 200D support at $14.83

CDNA’s technicals suggest a short-term overbought condition but a strong breakout from its 200-day average. The stock is trading near the upper Bollinger Band, indicating heightened volatility. For options traders, the CDNA20260116C20 call option (strike $20, expiration Jan 16) and CDNA20260220C22.5 call (strike $22.5, expiration Feb 20) stand out. The former offers a 19.6% leverage ratio and 556% price change ratio, with implied volatility at 75.6%, while the latter has a 31.66% leverage ratio and 48.4% IV. Both contracts exhibit high gamma (0.204 and 0.109) and theta (0.170 and 0.021), making them ideal for short-term directional bets. A 5% upside scenario (targeting $21.56) would yield a $1.56 payoff for the $20 call and $4.06 for the $22.5 call. Aggressive bulls should consider the CDNA20260116C20 call into a retest of the $20.585 intraday high.

Backtest CareDx Stock Performance
The backtest of CDNA's performance following a 20% intraday increase from 2022 to the present reveals a significant underperformance. The strategy yielded a return of -58.82%, lagging the benchmark by 101.79%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.24, the strategy demonstrated a high level of risk and substantial volatility, highlighting the challenges of such a strategy in real market conditions.

Bullish Catalysts Intact: Act Now Before Volatility Fades
CareDx’s 19.8% rally is underpinned by robust Q4 results and strategic share repurchases, but technicals suggest a potential pullback as the RSI hovers near oversold levels. The stock’s proximity to the upper Bollinger Band and bearish MACD crossover signal caution for overextended buyers. However, the 200-day average at $16.35 remains a critical support level. With Medtronic (MDT) down 0.91%, investors should monitor sector sentiment but prioritize CDNA’s momentum-driven setup. For immediate action, target the $20.50 level as a dynamic entry point, with a stop-loss below $19.25 to protect gains.