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Bio Rad's (BIO) Product Launches Aid, Forex Woes Persist

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Bio-Rad Laboratories, Inc. (BIO - Free Report) has been witnessing strength in international markets. Further, strong key product lines across major geographic regions buoy optimism. Yet, competitive headwinds and currency fluctuations continue to pose a threat.The stock currently carries a Zacks Rank #3 (Hold).

Over the past year, Bio-Rad has outperformed its industry. The stock has gained 10.3% against the industry’s 6.5% decline.

Bio-Rad exited the third quarter of 2021 with better-than-expected results. The company witnessed solid top-and bottom-line growth in the reported quarter. An increase in demand for Droplet Digital PCR products along with core qPCR business growth, driven by the strong uptake of the latest generation CFX Opus platform, is encouraging. The uptick in the Clinical Diagnostics arm, driven by higher utilization in lab operations owing to a recovery in businesses from the COVID-19 pandemic, is encouraging as well. The raised 2021 revenue guidance is indicative of the continuation of this bullish trend.

BioRad Laboratories, Inc. Price

Further, strength in its key product lines across major geographic regions buoys optimism. In recent times, Bio-Rad has been deriving more than 60% of its net sales from the international markets. Europe happens to be the largest international market for the company. Geographically, the company registered quarterly growth at CER across the Americas and Asia. In the Life Science business, all regions witnessed growth compared with the year-ago quarter.

Further, Bio-Rad’s Clinical Diagnostics segment registered double-digit growth across all its product lines, driven by a recovery in routine testing. In June 2021, Bio-Rad teamed up with Seegene -- a global provider of multiplex molecular diagnostics. Bio-Rad will exclusively market the Seegene tests in the United States, pending regulatory approvals. The company also noted the gradual capacity improvement at both academic and diagnostic labs.

On the flip side, during the third quarter, Bio-Rad’s operating expenses rose 8.9% year over year. The year-over-year rise in operating costs is building pressure on the bottom line. Moreover, BIO’s underlying Life Science business declined 2% on a currency-neutral basis due to lower COVID-related sales.

Bio-Rad has been involved in the multi-year implementation of a new global enterprise resource planning (ERP) system. Any shortfall in the design or implementation of ERP might have a detrimental impact on the company’s abilities to process and dispatch orders, send invoices and track payments, meet contractual obligations or maintain normal business operations.

Further, foreign-exchange woes, stiff competition and pandemic-led macroeconomic troubles persist.

Key Picks

A few better-ranked stocks in the broader medical space include AMN Healthcare Services, Inc. (AMN - Free Report) , Apollo Endosurgery, Inc.  and Laboratory Corporation of America Holdings (LH - Free Report) .

AMN Healthcare, carrying a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.

AMN Healthcare has outperformed its industry over the past year. AMN has gained 66.1% versus the 54.9% industry decline.

Apollo Endosurgery, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average.

Apollo Endosurgery has outperformed its industry in the past year. APEN has gained 125.6% compared with the industry’s 1.2% growth.

Laboratory Corporation surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.7%. The company currently sports a Zacks Rank #1.

Laboratory Corporation’s long-term earnings growth rate is estimated at 10.6%. The company’s earnings yield of 9.4% compares favorably with the industry’s 3.4%.


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