Shares of Grail have experienced significant growth, particularly since mid-September, driven by positive updates regarding the FDA approval process for its Galleri test, which screens for multiple cancers through a blood sample. Despite this momentum, CNBC's Jim Cramer warns that the stock has become speculative, especially after a recent 10.9% drop attributed to profit-taking.
While the stock's year-to-date performance is impressive, Cramer emphasizes the importance of understanding the risk profile, as Grail remains unprofitable and trades at a high valuation of nearly 34 times sales.
The Galleri test, which is currently sold without full FDA approval, has shown promising revenue growth but has faced scrutiny regarding its effectiveness, particularly following a significant study that missed its primary endpoint.
Cramer suggests that FDA approval could be a gamechanger, potentially leading to insurance coverage and broader adoption, but investors should approach with caution and consider starting with a small position