Shares of Caris Life Sciences Inc. (CAI) are having a very good Friday. The molecular diagnostics company just delivered a one-two punch that investors love: a massive earnings beat and some genuinely exciting news about its pipeline.
Let's start with the money. For the fourth quarter, Caris reported earnings of 28 cents per share. That might not sound like a lot, but the market was expecting a loss of 3 cents. So, a profit when you were supposed to lose money is a pretty good trick. Sales were even more impressive, jumping 125% year-over-year to $292.89 million, which also crushed the consensus estimate of $208.63 million.
Where did all that growth come from? The core business of molecular profiling services, which helps guide cancer therapy decisions, saw revenue skyrocket 199% to $282.1 million. The company completed about 52,700 clinical cases in the quarter, a 20% increase from a year ago. That volume, combined with what the company calls "ASP improvements" (that's average selling price, in plain English), led to a reported gross margin of 75%—a staggering 2,000 basis point improvement. The company also swung to a positive Adjusted EBITDA of $106.1 million from a loss of $23 million a year ago.
"Demand for our platform continued to accelerate in 2025, driving strong growth in volume and revenue and expanding adoption across our solutions," said David Dean Halbert, Founder, Chairman, and CEO of Caris Life Sciences. "We are focused on building on this momentum, advancing our pipeline, and are particularly excited about the planned launch of our Caris Detect solution in the first half of 2026, which we believe represents a significant growth opportunity for Caris."
Speaking of Caris Detect, that brings us to the second part of the story. The company released an interim readout from its Achieve 1 study, which is evaluating this multi-cancer early detection test. The test uses Whole Genome Sequencing, and the early data showed it had superior sensitivity and specificity compared to traditional methods. The study involved about 1,505 samples from undiagnosed patients. More results from a blinded validation phase are expected later in the first quarter of 2026. This is the kind of data that can make or break a company in this space, and so far, it looks promising.
Caris also highlighted that it has now processed over one million total cases, generating more than 50 billion molecular markers. That's a massive data trove, which is the fuel for developing better, AI-driven cancer detection tools.
Looking ahead, management provided guidance for fiscal 2026. They expect sales between $1.0 and $1.02 billion. It's worth noting that this is below the current analyst consensus of $1.198 billion. They also expect operating expenses to increase 19% to 20% to a range of $590 million to $595 million, citing commercial expansion and more pipeline trial activities. Despite that spending, the company expects to remain positive on both Free Cash Flow and Adjusted EBITDA.
Analysts have been taking notice. The stock carries a consensus Buy rating with an average price target of $33.63. Recent moves include Baird initiating coverage with an Outperform rating and a $26 target in February, and Canaccord Genuity maintaining a Hold rating while raising its target to $30 in late December.
The market's reaction says it all. According to market data, Caris Life Sciences shares were up 20.43% at $23.17 during Friday's premarket trading. When you beat earnings by a mile and show your next big product might actually work, that tends to get people's attention.
