CareDx (NASDAQ: CDNA) shares are soaring 5.41% in pre-market trading on Friday, following the release of its better-than-expected first-quarter 2025 financial results and an analyst report suggesting the stock may be undervalued.

The transplant diagnostics company reported a revenue of $84.7 million for Q1 2025, marking an 18% increase from the same period last year. While the revenue was in line with analyst estimates, CareDx's earnings per share (EPS) surpassed expectations by 5%. The company's net loss narrowed to $10.4 million, or $0.19 per share, showing a significant improvement from the $0.32 loss per share in Q1 2024.

Adding to the positive sentiment, a recent intrinsic value calculation suggests that CareDx might be undervalued by approximately 28%. The analysis, using a Discounted Cash Flow (DCF) model, estimates the company's fair value at $20.92 per share, compared to its current trading price of around $15.07. This potential undervaluation, coupled with the strong quarterly results, appears to be driving investor interest in the stock. However, investors should note that the company still faces some challenges, including forecasts of declining annual earnings for the next three years.