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Meridian Bioscience and NeuroPace have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – March 21, 2022 – Zacks Equity Research shares Meridian Bioscience as the Bull of the Day and NeuroPace (NPCE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Volkswagen (VWAGY - Free Report) , Toyota (TM - Free Report) and Tesla (TSLA - Free Report) .
Meridian Bioscience is a $1 billion provider of diagnostic test kits for gastrointestinal and respiratory infectious diseases.
In addition, the company develops and manufactures a variety of biological and non-biological materials used in proficiency testing programs. Meridian diagnostic products are used outside of the human body and require little or no special equipment.
VIVO became a Zacks #1 Rank Strong Buy after its last earnings report which prompted Wall Street analysts to raise this year's EPS consensus 17% from $1.04 to $1.22.
On February 4, Meridian delivered a beat-and-raise Q1 for FY'22 (ends Sep) that sent shares up 26% over the next 3 sessions.
Meridian reported Q1 EPS of 35-cents vs the consensus of 25-cents and Q1 revenue of $88.3 million vs the consensus of approximately $73.5M.
Jack Kenny, CEO, commented, "While disappointed that we are fighting yet another wave of COVID-19 infections across the globe, I am pleased to report that Meridian delivered an outstanding quarter. Continued strength in our Life Science segment, coupled with growing momentum in the Diagnostics segment, is a sign of the company's potential in fiscal 2022 and beyond."
Guidance Boost
Meridian Bioscience raised their FY22 adjusted EPS view to $1.10-$1.30 from 98c-$1.07.
And they raised FY22 their revenue view to $315.0M-$330.0M, from $285M-$300M.
Management projects FY22 Diagnostics segment revenue of $145.0M-$150.0M and Life Science revenue of $170.0M-$180.0M.
The company said, "The performance of both segments in the first quarter exceeded our expectations. Based on these results and current demand for Life Science segment reagents, we are raising our guidance for the full fiscal year."
Analyst Reaction
Here were two positive analyst reactions to the turn-around in top and bottom-line growth...
Meridian Bioscience price target raised to $30 from $28 at H.C. Wainwright: Analyst Yi Chen raised the firm's price target and reiterated a Buy rating on the shares following the "robust" fiscal Q1 beat. The analyst says H. pylori testing may provide "significant growth" for Meridian's diagnostics segment.
William Blair analyst Brian Weinstein noted that the quarter included particularly difficult comps across the business given the company's all-time record first quarter of 2021 with $92.9 million in sales...
"Overall, we view this update as an indication of sound execution across both business segments as the company continues to take advantage of the life sciences revenue opportunities presented by the pandemic while making behind-the-scenes progress to bring back growth in the diagnostics segment."
The Blair team maintains an Outperform rating on VIVO shares.
Disclosure: I own VIVO for the Zacks Healthcare Innovators portfolio.
NeuroPace is a $200 million commercial-stage medical device company focused on developing products to treat and transform the lives of patients suffering from epilepsy. NeuroPace Inc. is based in Mountain View, CA.
The company's patented RNS® System is the only FDA-approved epilepsy device that delivers personalized treatment by responding to abnormal brain activity and provides EEG data that can help improve patient care.
The RNS System is a treatment for adults with drug-resistant focal epilepsy. The NeuroPace website describes the benefits of their platform with these three key benefits...
The RNS System can help patients achieve significant seizure reduction and quality of life improvements.
Data from the RNS System provides unprecedented visibility into seizure trends and triggers that can help physicians optimize patient treatment plans.
The RNS System responds to a patient's unique seizure fingerprint -- so patients get the treatment they need, when they need it.
A Longer Path to EPS Growth
The reason that NPCE is in the cellar of the Zacks Rank is due to recent disappointments on their quarterly earnings reports.
After their most recent report, the three Wall Street analysts providing earnings model coverage revised their consensus EPS projection down 52% for this year from a loss of $1.29 to a loss of $1.96.
And the Zacks EPS consensus for 2023 was dropped 51% from a loss of $1.04 to a loss of $1.57.
The good news is that for now, the 2023 consensus projection for $56.7 million in revenue, representing 22.8% growth, is still intact. This means the stock is trading under four times forward sales estimates.
NeuroPace is an exciting company with what appears to be an innovative solution to treating epilepsy. As soon as earnings estimates stop going down and stabilize, it could be a welcome addition to a portfolio seeking small-cap medical device growth.
The Zacks Rank will let you know.
Additional content:
Volkswagen (VWAGY - Free Report) Outlook Murky Amid Ukraine Crisis
Germany-based auto major Volkswagen's CEO Herbert Diess expects the company's 2022 prospects to be hit by the Russia-Ukraine war in unforeseen ways. Russia's attack on Ukraine has compounded supply chain issues and resulted in the shortage of parts and components sourced from Ukraine. Diess recently notified that the lack of wire harness, which plays a key role in connecting a variety of vehicle components, has now overtaken microchips shortfall and has become the company's major supply concern.
While Volkswagen posted solid 2021 results and delivered on the NEW AUTO strategy, the geopolitical conflict between Russia and Ukraine is likely to prove a major speed bump in the firm's progress. When the company unveiled 2021 results last week, it envisioned sales growth of 8-13% this year.
Sales growth was 12% in 2021. Aggravating logistical challenges and the shortage of key parts — especially wire harnesses — might force Volkswagen to cut its 2022 guidance if the company is unable to procure wiring harnesses from alternative sources in a month or so. This is what the company's CEO believes. Quoting him, "The war in the Ukraine has put our existing outlook into question."
Diess also anticipates the commodity markets to remain volatile until 2026. VWAGY's CFO Arno Antlitz expects escalating costs of raw materials to result in manufacturing inefficiencies and high production expenses, which would then be passed on to consumers. He has already warned that high commodity costs will drive the prices for both ICE and electric vehicles, as everything from batteries to catalytic converters would get more expensive.
Volkswagen has already halted production at two EV plants in Germany after the war broke out. Amid increasing instability and an uncertain environment in Europe, Diess had been contemplating to boost overall sales in China, wherein the company commands a huge presence.
Volkswagen aims to double the sales of electrified vehicles in China in 2022. However, that also looks a bit uncertain now, as renewed coronavirus infections have triggered a lockdown in as many as 10 cities in the country. VWAGY suspended part of its operations in China amid rising COVID-19 infections. The company runs a joint venture operation with FAW and has suspended production at its vehicle and component plants.
Another auto biggie Toyota also temporarily suspended operations at its joint venture plant with FAW group in Changchun in China. The Changchun facility produces the mainstay RAV4 sports utility vehicle. Toyota is yet to announce plans to reopen the plant.
Toyota, in January, halted activities at a joint venture plant in Tianjin, China, following the onslaught of the Omicron variant of coronavirus in the city. The hiatus resulted in a drop in its sales by about 20% in January from the year before. There has been an uptick in the sales figure by about 10% since then, but it is likely to be dented once more if operations at the Changchun plant remain suspended for a prolonged period.
EV behemoth Tesla also halted operations at the Shanghai gigafactory for two days this week, as China tightened COVID-19 restrictions. The company also announced an overnight price increase in the range of 5-10% throughout its entire lineup of vehicles in China and the United States this week. Even last week, the auto magnate raised prices, charging $1,000 extra for all vehicles equipped with long-range battery packs. But the latest price increase is more glaring.
Inflationary pressure in raw materials and logistics, which have been exacerbated by the Russia-Ukraine war, has prompted the company to hike the prices of its vehicle models. Tesla's cheapest electric car, the Model 3-Rear Wheel Drive, is now priced at $46,990, up from $44,990. Its price increased by a whopping $2,000 within just a week.
The price of Model 3 Performance was increased by $3,000. As for the Model Y, Tesla increased the base price by $2,000. The price of the Performance version of the electric SUV was hiked by $3,000.
Tesla's flagship products, Model S and Model X, also saw a steep price rise. Model S and its performance version now cost an extra $5,000 each. Model X was spared from the previous price increases but this time, the electric SUV witnessed a price rise of $10,000.
Why Haven't You Looked at Zacks' Top Stocks?
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Meridian Bioscience and NeuroPace have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 21, 2022 – Zacks Equity Research shares Meridian Bioscience as the Bull of the Day and NeuroPace (NPCE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Volkswagen (VWAGY - Free Report) , Toyota (TM - Free Report) and Tesla (TSLA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Meridian Bioscience is a $1 billion provider of diagnostic test kits for gastrointestinal and respiratory infectious diseases.
In addition, the company develops and manufactures a variety of biological and non-biological materials used in proficiency testing programs. Meridian diagnostic products are used outside of the human body and require little or no special equipment.
VIVO became a Zacks #1 Rank Strong Buy after its last earnings report which prompted Wall Street analysts to raise this year's EPS consensus 17% from $1.04 to $1.22.
On February 4, Meridian delivered a beat-and-raise Q1 for FY'22 (ends Sep) that sent shares up 26% over the next 3 sessions.
Meridian reported Q1 EPS of 35-cents vs the consensus of 25-cents and Q1 revenue of $88.3 million vs the consensus of approximately $73.5M.
Jack Kenny, CEO, commented, "While disappointed that we are fighting yet another wave of COVID-19 infections across the globe, I am pleased to report that Meridian delivered an outstanding quarter. Continued strength in our Life Science segment, coupled with growing momentum in the Diagnostics segment, is a sign of the company's potential in fiscal 2022 and beyond."
Guidance Boost
Meridian Bioscience raised their FY22 adjusted EPS view to $1.10-$1.30 from 98c-$1.07.
And they raised FY22 their revenue view to $315.0M-$330.0M, from $285M-$300M.
Management projects FY22 Diagnostics segment revenue of $145.0M-$150.0M and Life Science revenue of $170.0M-$180.0M.
The company said, "The performance of both segments in the first quarter exceeded our expectations. Based on these results and current demand for Life Science segment reagents, we are raising our guidance for the full fiscal year."
Analyst Reaction
Here were two positive analyst reactions to the turn-around in top and bottom-line growth...
Meridian Bioscience price target raised to $30 from $28 at H.C. Wainwright: Analyst Yi Chen raised the firm's price target and reiterated a Buy rating on the shares following the "robust" fiscal Q1 beat. The analyst says H. pylori testing may provide "significant growth" for Meridian's diagnostics segment.
William Blair analyst Brian Weinstein noted that the quarter included particularly difficult comps across the business given the company's all-time record first quarter of 2021 with $92.9 million in sales...
"Overall, we view this update as an indication of sound execution across both business segments as the company continues to take advantage of the life sciences revenue
opportunities presented by the pandemic while making behind-the-scenes progress to bring back growth in the diagnostics segment."
The Blair team maintains an Outperform rating on VIVO shares.
Disclosure: I own VIVO for the Zacks Healthcare Innovators portfolio.
Bear of the Day:
NeuroPace is a $200 million commercial-stage medical device company focused on developing products to treat and transform the lives of patients suffering from epilepsy. NeuroPace Inc. is based in Mountain View, CA.
The company's patented RNS® System is the only FDA-approved epilepsy device that delivers personalized treatment by responding to abnormal brain activity and provides EEG data that can help improve patient care.
The RNS System is a treatment for adults with drug-resistant focal epilepsy. The NeuroPace website describes the benefits of their platform with these three key benefits...
The RNS System can help patients achieve significant seizure reduction and quality of life improvements.
Data from the RNS System provides unprecedented visibility into seizure trends and triggers that can help physicians optimize patient treatment plans.
The RNS System responds to a patient's unique seizure fingerprint -- so patients get the treatment they need, when they need it.
A Longer Path to EPS Growth
The reason that NPCE is in the cellar of the Zacks Rank is due to recent disappointments on their quarterly earnings reports.
After their most recent report, the three Wall Street analysts providing earnings model coverage revised their consensus EPS projection down 52% for this year from a loss of $1.29 to a loss of $1.96.
And the Zacks EPS consensus for 2023 was dropped 51% from a loss of $1.04 to a loss of $1.57.
The good news is that for now, the 2023 consensus projection for $56.7 million in revenue, representing 22.8% growth, is still intact. This means the stock is trading under four times forward sales estimates.
NeuroPace is an exciting company with what appears to be an innovative solution to treating epilepsy. As soon as earnings estimates stop going down and stabilize, it could be a welcome addition to a portfolio seeking small-cap medical device growth.
The Zacks Rank will let you know.
Additional content:
Volkswagen (VWAGY - Free Report) Outlook Murky Amid Ukraine Crisis
Germany-based auto major Volkswagen's CEO Herbert Diess expects the company's 2022 prospects to be hit by the Russia-Ukraine war in unforeseen ways. Russia's attack on Ukraine has compounded supply chain issues and resulted in the shortage of parts and components sourced from Ukraine. Diess recently notified that the lack of wire harness, which plays a key role in connecting a variety of vehicle components, has now overtaken microchips shortfall and has become the company's major supply concern.
While Volkswagen posted solid 2021 results and delivered on the NEW AUTO strategy, the geopolitical conflict between Russia and Ukraine is likely to prove a major speed bump in the firm's progress. When the company unveiled 2021 results last week, it envisioned sales growth of 8-13% this year.
Sales growth was 12% in 2021. Aggravating logistical challenges and the shortage of key parts — especially wire harnesses — might force Volkswagen to cut its 2022 guidance if the company is unable to procure wiring harnesses from alternative sources in a month or so. This is what the company's CEO believes. Quoting him, "The war in the Ukraine has put our existing outlook into question."
Diess also anticipates the commodity markets to remain volatile until 2026. VWAGY's CFO Arno Antlitz expects escalating costs of raw materials to result in manufacturing inefficiencies and high production expenses, which would then be passed on to consumers. He has already warned that high commodity costs will drive the prices for both ICE and electric vehicles, as everything from batteries to catalytic converters would get more expensive.
Volkswagen has already halted production at two EV plants in Germany after the war broke out. Amid increasing instability and an uncertain environment in Europe, Diess had been contemplating to boost overall sales in China, wherein the company commands a huge presence.
Volkswagen aims to double the sales of electrified vehicles in China in 2022. However, that also looks a bit uncertain now, as renewed coronavirus infections have triggered a lockdown in as many as 10 cities in the country. VWAGY suspended part of its operations in China amid rising COVID-19 infections. The company runs a joint venture operation with FAW and has suspended production at its vehicle and component plants.
Another auto biggie Toyota also temporarily suspended operations at its joint venture plant with FAW group in Changchun in China. The Changchun facility produces the mainstay RAV4 sports utility vehicle. Toyota is yet to announce plans to reopen the plant.
Toyota, in January, halted activities at a joint venture plant in Tianjin, China, following the onslaught of the Omicron variant of coronavirus in the city. The hiatus resulted in a drop in its sales by about 20% in January from the year before. There has been an uptick in the sales figure by about 10% since then, but it is likely to be dented once more if operations at the Changchun plant remain suspended for a prolonged period.
EV behemoth Tesla also halted operations at the Shanghai gigafactory for two days this week, as China tightened COVID-19 restrictions. The company also announced an overnight price increase in the range of 5-10% throughout its entire lineup of vehicles in China and the United States this week. Even last week, the auto magnate raised prices, charging $1,000 extra for all vehicles equipped with long-range battery packs. But the latest price increase is more glaring.
Inflationary pressure in raw materials and logistics, which have been exacerbated by the Russia-Ukraine war, has prompted the company to hike the prices of its vehicle models. Tesla's cheapest electric car, the Model 3-Rear Wheel Drive, is now priced at $46,990, up from $44,990. Its price increased by a whopping $2,000 within just a week.
The price of Model 3 Performance was increased by $3,000. As for the Model Y, Tesla increased the base price by $2,000. The price of the Performance version of the electric SUV was hiked by $3,000.
Tesla's flagship products, Model S and Model X, also saw a steep price rise. Model S and its performance version now cost an extra $5,000 each. Model X was spared from the previous price increases but this time, the electric SUV witnessed a price rise of $10,000.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.