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Here's Why You Should Retain Luminex (LMNX) Stock for Now

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Luminex Corporation is well poised for growth backed by its solid molecular diagnostics, ARIES platforms and robust product portfolio.

Shares of Luminex have gained 65.8%, compared with the industry’s rally of 10.4% in a year’s time. Meanwhile, the S&P 500 Index has risen 6.3% in the same timeframe.

Luminex, with a market capitalization of $1.35 billion, develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. It anticipates earnings to improve 80% in second-quarter 2020.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).



What’s Deterring the Stock?

Luminex operates in the highly competitive life sciences industry. The industry is characterized by rapid and continuous technological innovation. Currently, it is facing significant competition in the respiratory market.

What’s Favoring the Stock?

Luminex has a broad product portfolio that comprises advanced xMAP, xTAG and Multi Code technology. Per management, 2020 will be a transformative year for the company owing to three new product launches supporting a return-to-accelerated growth.

Recently, the company delivered the first of its new xMAP INTELLIFLEX Systems to several of its Life Science Research Partners. This marks a significant milestone in the company’s strategy with respect to the expansion of its xMAP Technology with new functionality to facilitate new applications. By the end 2020, the company intends to fully commercialize this next generation of xMAP Technology.

Moreover, the company’s molecular diagnostics platform received a boost on the back of new tests for coronavirus detection. In June, the company submitted an Emergency Use Authorization (EUA) request to the FDA for its xMAP SARS-CoV-2 Multi-Antigen IgG assay. The assay has been created to offer additional capacity to detect antibodies in patients who might have been exposed to or infected by SARS-CoV-2. Notably, this COVID-19 antibody test can deliver outstanding results for up to 96 samples in under three hours and has been developed to run on all xMAP platforms.

Further, in April, the company announced that it has received EUA from the FDA for its ARIES SARS-CoV-2 Assay that can rapidly detect the virus causing COVID-19. This development is likely to enable hospital professionals to decide the appropriate course of treatment for patients, who might be infected with COVID-19, within about two hours.

The company also has been making noteworthy progress with one of its major products — the ARIES system, which holds revenue potential. The company is focused on fortifying its market leadership in infectious disease with sample to answer platform, the ARIES system.

Estimates Trend

For 2020, the Zacks Consensus Estimate for revenues is pegged at $383.4 million, indicating an improvement of 14.6% from the prior-year period. The same for earnings stands at 17 cents per share, suggesting whopping growth of 180.9% from the year-ago reported figure.

Stocks to Consider

Some better-ranked stocks from the broader medical space include Quest Diagnostics Incorporated (DGX - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Laboratory Corporation of America Holdings (LH - Free Report) . While Quest Diagnostics and Laboratory Corporation sport a Zacks Rank #1 (Strong Buy), West Pharmaceutical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Quest Diagnostics has an estimated long-term earnings growth rate of 7.6%.

Laboratory Corporation has an estimated long-term earnings growth rate of 6.1%. 

West Pharmaceutical has a projected long-term earnings growth rate of 9.2%.

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