Guardant Health Inc. (GH) shares plummeted 5.29% in pre-market trading on Thursday, despite the company reporting strong second-quarter results and receiving target price upgrades from analysts. This unexpected drop has left investors puzzled, given the seemingly positive news surrounding the precision oncology company.

Guardant Health reported impressive Q2 2025 results, with revenue soaring 31% year-over-year to $232.1 million, beating analyst estimates by $20.6 million. The company's non-GAAP earnings per share also improved to ($0.44), surpassing expectations of ($0.73). Furthermore, Guardant Health raised its full-year 2025 revenue guidance to $915–$925 million, reflecting continued strong momentum in its Shield and core oncology products.

Following the earnings report, both Scotiabank and Leerink Partners raised their target prices for Guardant Health. Scotiabank increased its target from $57 to $60, while Leerink Partners raised its projection from $65 to $70. These upgrades typically signal confidence in a company's future performance. However, the stock's significant drop suggests that investors may be focusing on other factors not immediately apparent in the earnings report or analyst upgrades. Possible explanations could include concerns about the company's ongoing cash burn, competitive pressures in the precision oncology market, or broader market volatility affecting growth stocks. As the trading day progresses, it will be crucial to monitor any additional news or analyst commentary that might shed light on this disconnected market reaction.