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3 Reasons to Hold QuidelOrtho (QDEL) Stock in Your Portfolio
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QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio and a few product launches. However, headwinds due to third-party reimbursement policies and overdependence on diagnostic tests persist.
So far this year, this Zacks Rank #3 (Hold) stock has lost 31.4% compared with the industry’s 45.4% fall and the S&P 500's 18.4% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $6.1 billion. QuidelOrtho’s earnings yield of 14.7% compares favorably with 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 60.13%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which are sold 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 test following the reopening of schools and at many other locations.
Product Launch: We are upbeat about numerous product launches by QuidelOrtho over the past few months. In August, the company confirmed that it had launched seven new assets globally in its labs business unit. The most notable was the U.S. launch of hemoglobin A1c, which has been registering very strong demand and significant opportunities in QuidelOrtho’s sales funnel. The company expects to continue launching new products in the United States for the rest of 2022.
Strong Q3 Results: QuidelOrtho ended the third quarter of 2022 with better-than-expected results. Its robust overall top-line performance, driven by POC and Donor Screening product lines, was impressive. The company recorded strong revenues in the majority of its geographies at CER, excluding COVID revenues. Continued strength in QuidelOrtho’s comprehensive product portfolio and expanded global commercial footprint also raise optimism about the stock. The progress made by the company regarding the integration of its QuidelOrtho business is also promising.
Downsides
Third-Party Reimbursement Policies: The end users of QuidelOrtho’s Point-of-Care products are primarily physicians and other healthcare providers. In the United States, healthcare providers, like hospitals and physicians, who purchase diagnostic products generally rely on third-party payers to reimburse all or part of the cost of the procedure. The use of QuidelOrtho’s products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of the company’s products from their patients’ third-party payers.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID and influenza tests and is expected to remain a significant portion of the company’s total revenues, at least in the near future. As a result, if sales or revenues of COVID or influenza tests fall for any reason, the company’s operating results would be affected.
In the past 60 days, the Zacks Consensus Estimate for its 2022 earnings has improved by 7.9% to $13.42.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $753 million, suggesting an 18.2% improvement from the year-ago fiscal quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space areAMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 11%.
AMN Healthcarehas lost 3.8% compared with the industry’s 30% decline so far this year.
ShockWave Medical, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 21.2% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 30.5% against the industry’s 26.9% decline so far this year.
McKesson, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 52.1% against the industry’s 12.8% decline so far this year.
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3 Reasons to Hold QuidelOrtho (QDEL) Stock in Your Portfolio
QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio and a few product launches. However, headwinds due to third-party reimbursement policies and overdependence on diagnostic tests persist.
So far this year, this Zacks Rank #3 (Hold) stock has lost 31.4% compared with the industry’s 45.4% fall and the S&P 500's 18.4% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $6.1 billion. QuidelOrtho’s earnings yield of 14.7% compares favorably with 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 60.13%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which are sold 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 test following the reopening of schools and at many other locations.
Product Launch: We are upbeat about numerous product launches by QuidelOrtho over the past few months. In August, the company confirmed that it had launched seven new assets globally in its labs business unit. The most notable was the U.S. launch of hemoglobin A1c, which has been registering very strong demand and significant opportunities in QuidelOrtho’s sales funnel. The company expects to continue launching new products in the United States for the rest of 2022.
Strong Q3 Results: QuidelOrtho ended the third quarter of 2022 with better-than-expected results. Its robust overall top-line performance, driven by POC and Donor Screening product lines, was impressive. The company recorded strong revenues in the majority of its geographies at CER, excluding COVID revenues. Continued strength in QuidelOrtho’s comprehensive product portfolio and expanded global commercial footprint also raise optimism about the stock. The progress made by the company regarding the integration of its QuidelOrtho business is also promising.
Downsides
Third-Party Reimbursement Policies: The end users of QuidelOrtho’s Point-of-Care products are primarily physicians and other healthcare providers. In the United States, healthcare providers, like hospitals and physicians, who purchase diagnostic products generally rely on third-party payers to reimburse all or part of the cost of the procedure. The use of QuidelOrtho’s products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of the company’s products from their patients’ third-party payers.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID and influenza tests and is expected to remain a significant portion of the company’s total revenues, at least in the near future. As a result, if sales or revenues of COVID or influenza tests fall for any reason, the company’s operating results would be affected.
QuidelOrtho Corporation Price
QuidelOrtho Corporation price | QuidelOrtho Corporation Quote
Estimates Trend
In the past 60 days, the Zacks Consensus Estimate for its 2022 earnings has improved by 7.9% to $13.42.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $753 million, suggesting an 18.2% improvement from the year-ago fiscal quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space areAMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 11%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcarehas lost 3.8% compared with the industry’s 30% decline so far this year.
ShockWave Medical, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 21.2% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 30.5% against the industry’s 26.9% decline so far this year.
McKesson, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 52.1% against the industry’s 12.8% decline so far this year.