Veracyte Inc. (NASDAQ:VCYT) had a rough Thursday. The diagnostics company reported third-quarter results that beat Wall Street's estimates on both earnings and revenue, announced a $100 million share buyback, and still watched its stock get cut in half. Shares were down 54.73% at $23.77 at the time of publication, a new 52-week low, according to market data.

So what went wrong? The culprit wasn't the headline numbers. It was the volume of one specific test.

Veracyte Beats Third-Quarter Estimates

On paper, the quarter looked solid. Veracyte reported adjusted earnings of 51 cents per share, comfortably beating the 41 cents analysts expected. Revenue rose 15% year over year to $151.754 million, topping the consensus estimate of $147.439 million.

Total test volume rose 15% to 52,744 tests, while testing volume increased 13% to 49,498 tests. Decipher Prostate volume reached about 29,900 tests, and Afirma volume totaled roughly 19,100 tests. Both grew 12% year over year.

But during the earnings call, management revealed a split: Afirma exceeded expectations, while Decipher Prostate fell short.

Decipher Prostate Growth Raises Concerns

That shortfall is becoming a pattern. William Blair analyst Matt Larew warned Thursday that the second straight Decipher volume miss could raise fresh concerns about the test's long-term growth. Decipher missed internal expectations by about 1,000 tests, following a second-quarter shortfall linked to weaker growth in low-risk patients.

Veracyte also lowered its expected annual Decipher volume growth to 12,000-15,000 tests from roughly 20,000, citing market normalization and competition. Larew cautioned that a prolonged slowdown could leave Veracyte's newer tests struggling to offset weaker Decipher growth. William Blair maintained its Outperform rating on the stock.

CEO Marc Stapley said the company plans to expand its bioinformatics capabilities to strengthen the clinical evidence supporting Decipher.

Other Analyst Updates

• Needham maintained its Buy rating but cut its price forecast from $69 to $46.
• Leerink Partners downgraded Veracyte from Outperform to Market Perform and lowered its price forecast from $55 to $35.

Veracyte Narrows 2026 Revenue Forecast

Veracyte narrowed its fiscal 2026 revenue forecast to $590 million-$593 million from $590 million-$596 million. Wall Street expects $593.894 million, above the company's revised range.

In other words, the beat was real, but the growth story just got a little less certain. And in this market, uncertainty gets priced in fast.