GRAL: Future Returns Will Hinge On Upcoming NHS Trial Readout

The average analyst price target for Grail has edged down by $0.50 to about $114.50, as analysts balance optimism around upcoming trial readouts and potential regulatory milestones with a more cautious stance after the stock's very large move earlier in 2025 and ongoing execution risks.

Analyst Commentary

Recent research on Grail reflects a mix of enthusiasm for its position in multi cancer early detection and caution around valuation and execution timelines. Here is how bullish and bearish analysts are framing the story right now.

Bullish Takeaways

Some bullish analysts view Grail as a dominant early mover in what one firm sizes as a US$70b multi cancer early detection market, which they see as a key pillar of the long term growth case.
Upcoming clinical and regulatory milestones, including the NHS Galleri study readout and a potential Food and Drug Administration decision on Galleri, are seen by bullish analysts as possible triggers for broader adoption of the test and support for current valuation levels.
Bullish analysts highlight that Grail is already commercial stage with its Galleri blood test screening for more than 50 cancer types. They see this as a differentiator that could help convert clinical data into revenue growth over time.
Some bulls see the current price targets around US$113 to US$114 as supported by expectations for a favorable pivotal trial readout and eventual reimbursement, which they believe could expand the addressable revenue pool.

Bearish Takeaways

Bearish analysts point to the stock move of over 450% since January 2025 as a concern, arguing that much of the anticipated clinical and regulatory progress may already be reflected in the share price.
There is caution around execution risk, with some analysts stressing that the path from pivotal data to Food and Drug Administration approval and eventual Medicare coverage still involves timing and policy uncertainties that could affect revenue ramp and valuation support.
Some more cautious views emphasize that recent preliminary results, including what one major firm termed a modest Q4 revenue beat and guidance ahead of consensus, do not materially change their thesis. This keeps them comfortable with more neutral ratings and price targets around US$110.
Bearish analysts suggest that with shares already near or above current price targets, upside may be limited in the near term as investors wait for the NHS Galleri readout and clearer visibility on regulatory and reimbursement milestones.

What's in the News

GRAIL reported topline results from the randomized NHS Galleri trial in England, covering three years of annual screening with Galleri in about 142,000 participants aged 50 to 77, focused on population level impact on cancer stage at diagnosis. (Key Developments)
The primary endpoint of a statistically significant reduction in Stage III to IV cancers was not met, although the trial showed a favorable trend toward fewer late stage cases in a prespecified group of 12 deadly cancers and a substantial reduction in Stage IV diagnoses over successive screening rounds. (Key Developments)
Annual Galleri screening plus standard of care in the NHS trial produced a fourfold improvement in overall cancer detection rate versus standard of care alone for several major cancers, with more Stage I to II cancers and fewer cancers detected via emergency presentation, and no serious safety concerns reported. (Key Developments)
GRAIL submitted the final module of its Premarket Approval application to the US Food and Drug Administration for the Galleri multi cancer early detection test, using data from the US PATHFINDER 2 study and the first year of the NHS Galleri trial, together with a bridging analysis to the current PMA version of the test. (Key Developments)
The company issued 2025 revenue guidance of US$147 million to US$148 million, which it describes as about 17% to 18% growth over 2024. (Key Developments)

Valuation Changes

Fair Value: updated slightly lower from $115.00 to $114.50, reflecting a small adjustment to the valuation anchor used in the model.
Discount Rate: moved modestly lower from 7.12% to 7.06%, which slightly raises the present value placed on future cash flows.
Revenue Growth: revised down from 28.31% to 26.56%, indicating a more cautious view on the pace of future dollar revenue expansion.
Net Profit Margin: trimmed from 16.96% to 16.15%, pointing to slightly lower expected dollar earnings efficiency over time.
Future P/E: increased from 130.77x to 142.25x, implying that a higher earnings multiple is being used despite the more muted growth and margin assumptions.

Positive clinical results and expanding commercial adoption of Galleri position GRAIL for strong regulatory momentum, payer support, and accelerated, diversified revenue growth.
Enhanced process scalability and disciplined cost control are improving margins and reducing losses, while global partnerships and demographic trends drive long-term opportunity.
Sustained losses, uncertain regulatory milestones, margin pressures, costly commercialization, and intensifying competition could threaten GRAIL's path to profitability and market leadership.

Catalysts

About GRAIL

A commercial-stage healthcare company, provides multi-cancer early detection testing and services in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Ongoing positive clinical trial results-including substantially higher cancer detection and positive predictive value with consistent specificity for Galleri in population-scale studies-are setting the stage for robust FDA approval and broad payer reimbursement, which could unlock significant new revenue streams and accelerate top-line growth.
The rapid increase in commercial adoption of the Galleri test, repeat testing rates now exceeding 25%, and integration onto large telehealth, digital, and diagnostics platforms (such as Everlywell and Quest Diagnostics) are scaling access and awareness, supporting higher recurring revenue and improving operating leverage.
Global demographic shifts toward older populations and rising cancer incidence are expanding the addressable market for early detection, positioning GRAIL to benefit from long-term, secular demand tailwinds that could drive sustained revenue growth.
Advances in automation and cost-efficient laboratory platforms are improving process scalability, which, combined with management's disciplined cost controls and reduced cash burn, are directly supporting gross margin expansion and decreasing net losses.
Near-term readouts from the 140,000-participant NHS Galleri study and further regulatory milestones position GRAIL for international expansion and partnership opportunities with public health systems globally, potentially driving future earnings and revenue diversification.

GRAIL Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming GRAIL's revenue will grow by 20.1% annually over the next 3 years.
Analysts are not forecasting that GRAIL will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate GRAIL's profit margin will increase from -329.9% to the average US Biotechs industry of 16.1% in 3 years.
If GRAIL's profit margin were to converge on the industry average, you could expect earnings to reach $37.3 million (and earnings per share of $0.85) by about September 2028, up from $-443.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 58.1x on those 2028 earnings, up from -2.6x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

GRAIL Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent high net losses ($114M for the quarter) and ongoing cash burn (guided to $310M for 2025) indicate that GRAIL is not yet close to profitability; this sustained unprofitability-even as revenues grow-could significantly constrain long-term earnings and erode shareholder value if not addressed.
GRAIL's future revenue growth is heavily dependent on achieving broad payer reimbursement and FDA approval, both of which hinge on positive readouts from clinical utility studies (e.g., the NHS Galleri trial); any negative or inconclusive trial results, or delays in regulatory approval, could severely dampen revenue forecasts and stall adoption.
Declining average selling prices (ASP down 6% YoY) and increased sample reprocessing costs (higher costs from issues with the new automation platform) point to pressures on gross margins, which, if unresolved or exacerbated by scale, could limit future profitability even in a growth scenario.
The need for extensive customer and provider education-due to the novelty and complexity of MCED-implies continued high sales and support costs; if required spending on commercial infrastructure (including international expansion and platform integrations) rises faster than sales, net margins could be compressed for an extended period.
Early liquid biopsy and MCED markets are rapidly becoming more competitive, with both established diagnostics companies and new entrants vying for share; even with GRAIL's current data advantage, faster, cheaper, or more accurate competing products could threaten future market share and revenue streams, especially if rivals win payor or regulatory favor.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $40.5 for GRAIL based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $232.5 million, earnings will come to $37.3 million, and it would be trading on a PE ratio of 58.1x, assuming you use a discount rate of 6.8%.
Given the current share price of $32.42, the analyst price target of $40.5 is 20.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

GRAL: Execution Risks Remain High Amid PATHFINDER 2 Progress And Regulatory Shifts