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Luminex Poised on Pipeline Strength, System Sales Upbeat

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On Aug 29, we issued an updated research report on Austin-based Luminex Corp – a manufacturer and marketer of proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. The company currently carries a Zacks Rank #3 (Hold).

Notably, after posting impressive second-quarter fiscal 2016 results, Luminex is currently well positioned on its pipeline strength that includes an exclusive range of assays and the company’s flagship Aries M1 platform.

In this connection, a glimpse at the second-quarter results reveals that Luminex generated strong revenues and adjusted earnings per share, beating the Zacks Consensus Estimate on both lines.

Additionally, solid system sales, which registered significant year-over-year growth in the reported quarter, is a key catalyst for the company’s impressive market position.

LUMINEX CORP Price and Consensus

 

LUMINEX CORP Price and Consensus | LUMINEX CORP Quote

Apart from the lucrative promises held by the company’s systems and assay portfolios, the collaboration with Nanosphere is another significant growth driver. Particularly, the Verigene System of Nanosphere is likely to significantly enhance Luminex’s growth trajectory in the coming quarters, in our view.

However, on the flip side, the volatility that persists with the departure of LabCorp, a blurry reimbursement landscape, inventory management problems at Luminex’s largest customer, and reduction in ‘Medicare reimbursement Rate’ are the major stock dampeners.

Luminex also expects consumer revenues to decline in the second half of the year, but still represent modest growth (close to 10%) for the full year.

In this regard, we note that, over the last 30 days, the Zacks Consensus Estimate for full-year 2016 earnings declined by 20 cents to 61 cents per share, as most analysts revised their estimates downward.

Stocks to Consider

Some better-ranked stocks in the broader medical space include Masimo Corporation (MASI - Free Report) , Quidel Corp. (QDEL - Free Report) and NuVasive Inc. . Notably, all the three stocks sport a Zacks Rank #1 (Strong Buy).

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