Caris Life Sciences falls 21.6% after earnings on higher spending warning

What happened

Caris Life Sciences (CAI) fell 21.6% on November 5, 2026, after its quarterly report warned that higher spending would weigh on operating profit even as revenue accelerated. The stock opened 18.2% below the previous close and closed at $26.03 on a session when volume was 2.3 times its 20-day average. The company had reported results on November 4, 2026, showing accelerating revenue and a modest earnings beat while management said spending on sales, marketing and new tests trimmed operating profit.

How big was the move

The one-day drop was 4.2 times a typical daily move for the stock and was 16.0 percentage points worse than the healthcare sector median, which fell 5.7% that day. The S&P 500 fell 4.4% on the session and had fallen 4.7% over the last five sessions; Caris fell 28.0% over its last five sessions. A beta of 2.34 indicates the stock tends to move more than the market, and trading at 2.3 times its 20-day average signaled unusually heavy selling.

The technical picture

The stock sat 18.1% below its 20-day moving average and 11.8% below its 50-day moving average while remaining 20.1% above its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend, and the stock had spent 56 consecutive trading days above the 200-day average before the recent sell-off. Its Relative Strength Index (14 days) was 36, placing it in a neutral range, and the distance from the 52-week high was 28.7% below that high. Volatility was 83% annualized over 60 days, the highest reading of the past five years.

Fundamentals and valuation

Over the four quarters through September 30, 2026, Caris reported revenue of $1.05 billion, which grew 61.5% from a year earlier, and generated diluted earnings per share of $0.33. Gross margin widened to 69.1% from 59.9% a year earlier, and operating margin rose to 13.4% from 6.8% a year earlier. Free-cash-flow margin stood at 4.9% and return on invested capital was 14.7%. The balance sheet showed net cash of $595.6 million, and share count over one year decreased by 0.7%.

Those fundamentals show rapid top-line expansion alongside improving margins and a strong cash position. At the same time, valuation metrics are rich relative to cash returns: the stock traded at 79.9 times trailing earnings and 216.2 times expected earnings, with a free-cash-flow yield of 0.5%. Market value stood at $9.70 billion, suggesting investors were pricing in sustained high growth despite thin cash yields.

Earnings and analyst expectations

In the last reported quarter on November 4, 2026, Caris posted quarterly earnings of $0.05 per share versus $0.03 expected, 77.7% above estimates, and management raised 2026 revenue guidance to $1.04 to $1.05 billion, implying 28% to 29% growth. That report marked one consecutive quarter beating estimates and an average surprise over the last four reports of 100.0% above estimates. Typical two-day reactions after recent reports had been modestly positive, with a typical move of rose 2.2%.

Analysts remain generally favorable. A consensus rating of Buy sits with 88% of covering analysts at Buy or Strong Buy and a consensus price target of $28.50 from eight analysts, about 9.5% above the closing price. The company’s next report is scheduled for February 25, 2027.

What to watch

• November 4, 2026: reported earnings per share of $0.05 against $0.03 expected, 77.7% above estimates
• 2026 revenue guidance: raised to $1.04 to $1.05 billion, implying 28% to 29% growth
• Four quarters through September 30, 2026: revenue $1.05 billion, grew 61.5% from a year earlier
• Volatility: 83% annualized over 60 days, the highest reading of the past five years
• Next report: February 25, 2027