Grail (GRAL) Stock: 3 Reasons to Buy the Cancer Test Play

Grail, a cancer detection company spun off from Illumina in 2024, has seen its stock surge to near record highs. The company's Galleri blood test, which screens for signals from dozens of cancers before symptoms appear, is already generating significant revenue even without FDA approval. In late September, an FDA advisory panel voted favorably on three key questions regarding Galleri's safety, effectiveness, and risk-benefit profile, providing a major boost to investor confidence.

The panel's endorsement is non-binding, but it sets the stage for a potential premarket approval by 2027. This comes after a setback in February when Grail's largest NHS England trial failed to meet its primary endpoint, though it did show earlier detection rates for deadly cancers. The FDA panel's positive votes have renewed hopes for a smoother regulatory path.

Meanwhile, Grail's commercial engine is humming. Revenue from cash sales of Galleri grew from $93 million in 2023 to $147 million in 2025, and analysts expect $181 million in 2026. Test volume in the first half of 2026 grew 42% year over year to over 117,000 tests. The test is currently sold for $749 to $949 to independent customers, employers, hospital pilot programs, and telehealth services.

With a market cap of $6.1 billion, Grail trades at 21 times its 2028 sales estimates. While that may seem rich, most analyst models only account for cash sales, not a full FDA approval that would open up insurance and Medicare reimbursement. If Galleri gets approved and adopted widely, the company could significantly outperform expectations.

The FDA panel's endorsement is a critical de-risking event for Grail. While not a final approval, it signals that regulators see promise in Galleri's ability to detect multiple cancers early. A formal approval, expected by 2027, would unlock a much larger addressable market through private insurance and Medicare. This could transform Grail from a cash-only niche player into a standard-of-care screening tool.

Grail's current revenue growth is impressive, but it's just the tip of the iceberg. The company's test volume is expanding rapidly, up 42% year over year, indicating strong demand even without reimbursement. If FDA approval comes through, that growth could accelerate as cost barriers drop for patients. The potential to save lives by detecting cancer earlier is enormous, and Grail is positioned as a leader in this space.

However, risks remain. The NHS trial failure in February highlighted the challenges of clinical validation. The FDA panel's vote is encouraging but not a guarantee. Additionally, competition in the liquid biopsy space is heating up, with companies like Exact Sciences and Guardant Health also developing multi-cancer detection tests. Grail's first-mover advantage and extensive data could be key differentiators.

Valuation is another consideration. At 21 times 2028 sales, Grail isn't cheap. But if approval leads to widespread adoption, those estimates could prove conservative. The stock is volatile and not for the faint of heart, but for long-term investors, the risk-reward profile is compelling. The market is pricing in significant uncertainty, which could lead to outsized gains if catalysts play out favorably.