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3 Reasons to Add QuidelOrtho (QDEL) Stock to Your Portfolio Now
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QuidelOrtho Corporation (QDEL - Free Report) has been gaining on the back of its strong product portfolio. A solid first-quarter 2022 performance, along with a few product launches, is expected to contribute further. However, headwinds due to data security threats and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #2 (Buy) stock has lost 22.5% compared with 31.9% fall of the industry and the S&P 500's 12.6% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $6.50 billion. QuidelOrtho’s earnings yield of 15.9% compares favorably against the industry’s negative yield. QuidelOrtho’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average surprise being 138.3%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which it sells directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter (“OTC”) use. The company has also begun to reach significant new markets as it introduced its QuickVue At-Home OTC COVID-19 test for reopening schools and many other locations.
Product Launch: We are upbeat about a number of product launches by QuidelOrtho over the past few months. During the first-quarter 2022 earnings call in May, the company had reconfirmed its plans to launch the Savanna system in the United States in 2022. QuidelOrtho had also confirmed that it intended to submit the Savanna system for emergency use approval for RVP4 in May and to submit 510(k) in July, with two more 510(k) panel submissions set for the end of the year and three more submissions by the end of first-quarter 2023.
Strong Q1 Results: QuidelOrtho’s robust first-quarter 2022 results buoy optimism. The company recorded robust overall top- and bottom-line performances. QuidelOrtho also registered strong Rapid Immunoassay and Specialized Diagnostic Solutions revenues, along with robust demand for COVID-19 and Influenza products. Expansion of adjusted operating margin bodes well for the stock.
Downsides
Data Security Threats: QuidelOrtho utilizes complex information technology systems to transmit and store information, including sensitive personal information and proprietary or confidential information, to support its business and process. In the future, these systems may prove to be inadequate to its business needs, and necessary upgrades may not operate as designed, resulting in excessive costs or disruptions in portions of the company’s business. In particular, disruptions, delays or deficiencies caused by QuidelOrtho’s enterprise resource planning systems could adversely affect its ability to process orders, among other matters.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests, which is expected to contribute a significant portion of the company’s total revenues for at least the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results would be adversely affected.
Estimate Trend
QuidelOrtho is witnessing a positive estimate revision trend for 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved 0.9% north to $15.44.
The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $475.9 million, suggesting a 169.5% improvement from the year-ago quarter’s reported number.
Other Key Picks
A few other stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and ShockWave Medical, Inc. (SWAV - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
AMN Healthcare has gained 18.2% against the industry’s 47.8% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.7% against the industry’s 10.1% fall over the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 44.9% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 189.9%.
ShockWave Medical has gained 5.9% against the industry’s 24.9% fall over the past year.
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3 Reasons to Add QuidelOrtho (QDEL) Stock to Your Portfolio Now
QuidelOrtho Corporation (QDEL - Free Report) has been gaining on the back of its strong product portfolio. A solid first-quarter 2022 performance, along with a few product launches, is expected to contribute further. However, headwinds due to data security threats and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #2 (Buy) stock has lost 22.5% compared with 31.9% fall of the industry and the S&P 500's 12.6% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $6.50 billion. QuidelOrtho’s earnings yield of 15.9% compares favorably against the industry’s negative yield. QuidelOrtho’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average surprise being 138.3%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which it sells directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter (“OTC”) use. The company has also begun to reach significant new markets as it introduced its QuickVue At-Home OTC COVID-19 test for reopening schools and many other locations.
Product Launch: We are upbeat about a number of product launches by QuidelOrtho over the past few months. During the first-quarter 2022 earnings call in May, the company had reconfirmed its plans to launch the Savanna system in the United States in 2022. QuidelOrtho had also confirmed that it intended to submit the Savanna system for emergency use approval for RVP4 in May and to submit 510(k) in July, with two more 510(k) panel submissions set for the end of the year and three more submissions by the end of first-quarter 2023.
Strong Q1 Results: QuidelOrtho’s robust first-quarter 2022 results buoy optimism. The company recorded robust overall top- and bottom-line performances. QuidelOrtho also registered strong Rapid Immunoassay and Specialized Diagnostic Solutions revenues, along with robust demand for COVID-19 and Influenza products. Expansion of adjusted operating margin bodes well for the stock.
Downsides
Data Security Threats: QuidelOrtho utilizes complex information technology systems to transmit and store information, including sensitive personal information and proprietary or confidential information, to support its business and process. In the future, these systems may prove to be inadequate to its business needs, and necessary upgrades may not operate as designed, resulting in excessive costs or disruptions in portions of the company’s business. In particular, disruptions, delays or deficiencies caused by QuidelOrtho’s enterprise resource planning systems could adversely affect its ability to process orders, among other matters.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests, which is expected to contribute a significant portion of the company’s total revenues for at least the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results would be adversely affected.
Estimate Trend
QuidelOrtho is witnessing a positive estimate revision trend for 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved 0.9% north to $15.44.
The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $475.9 million, suggesting a 169.5% improvement from the year-ago quarter’s reported number.
Other Key Picks
A few other stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and ShockWave Medical, Inc. (SWAV - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 18.2% against the industry’s 47.8% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has gained 0.7% against the industry’s 10.1% fall over the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 44.9% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 189.9%.
ShockWave Medical has gained 5.9% against the industry’s 24.9% fall over the past year.