Guardant Health's (GH) base business looks to be in "fundamentally good shape" and the company is poised for cash flow breakeven, excluding the screening segment, in Q4, Morgan Stanley said in a note emailed Thursday.

The company's biopharma segment continues to gain "healthy" traction as partnerships increase, the note added.

Starting this year, the company will report revenue in four different business lines: oncology, biopharma & data, licensing & other, and screening, Morgan Stanley said.

Looking ahead in Q1, oncology and screening revenue are anticipated to rise sequentially but it will not be sufficient to fully offset the decline in pharma, Morgan Stanley said, adding that after Q1, revenue should "ramp" throughout the year.

Morgan Stanley raised Guardant Health's price target to $52 from $42 and maintained an overweight rating on the stock.

Shares of the company were down 1.3% in recent Thursday trading.

Price: 42.13, Change: -0.53, Percent Change: -1.25