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Luminex (LMNX) Banks on Solid Product Line, Competition Rife
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On Feb 19, we issued an updated research report on Luminex Corp. . While balanced growth across all business segments instills confidence on the stock, reimbursement issues remain a major hurdle.
In the fourth quarter, this manufacturer and marketer of biological testing technologies for life sciences and diagnostics industry recorded strong top-line performance, solid cash flow and higher revenues. The company rides high on assay revenues, which grew 13.9% year over year in the quarter. Furthermore, revenues increased almost 8.2% year over year to $78.2 million.
Moreover, gross margin expanded 318 basis points (bps) to 64.4%, while operating margin improved a whopping 1118 bps to 14.4%.
Of late, Luminex has been receiving a series of regulatory approvals for its flagship ARIES system. The FDA has approved the ARIES Group B Strep assay. In the recent past, the fourth and fifth FDA clearances for ARIES Bordetella and ARIES C. Difficile assays are also worth a mention. Luminex also gained CE-IVD mark for Norovirus and C. Difficile.
Recently, the company witnessed significant developments in its VERIGENE platform. On the international front, Japan's Central Social Insurance Medical Council has approved the recommendation by the Japanese Ministry of Health, Labor and Welfare to provide reimbursement for two VERIGENE assays — The Gram-Positive Blood Culture (BC-GP) test and the Gram-Negative Blood Culture (BC-GN) test.
In the past year, Luminex has underperformed the broader industry. The stock has returned 7.8%, compared with the industry’s rally of 23.5%.
Additionally, the company may be impacted by changes to the reimbursement landscape. It has been experiencing a drop in lab customer traffic, owing to the new molecular diagnostic code system established by the Centers for Medicare and Medicaid Services. This has also dented the company’s Assay revenues.
Luminex operates in a market characterized by rapid and continuous technological innovation. Intense competition in the niche space adds to the woes.
Centene projects long-term growth rate of 14.4%. In the last six months, the stock has returned 16.3%.
Haemonetics has an expected long-term growth rate of 10.8%. In the past month, the stock has returned 4.9%.
HCA Healthcare has an expected long-term growth rate of 11.5%. In the past month, the stock has returned 8.7%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Luminex (LMNX) Banks on Solid Product Line, Competition Rife
On Feb 19, we issued an updated research report on Luminex Corp. . While balanced growth across all business segments instills confidence on the stock, reimbursement issues remain a major hurdle.
In the fourth quarter, this manufacturer and marketer of biological testing technologies for life sciences and diagnostics industry recorded strong top-line performance, solid cash flow and higher revenues. The company rides high on assay revenues, which grew 13.9% year over year in the quarter. Furthermore, revenues increased almost 8.2% year over year to $78.2 million.
Moreover, gross margin expanded 318 basis points (bps) to 64.4%, while operating margin improved a whopping 1118 bps to 14.4%.
Of late, Luminex has been receiving a series of regulatory approvals for its flagship ARIES system. The FDA has approved the ARIES Group B Strep assay. In the recent past, the fourth and fifth FDA clearances for ARIES Bordetella and ARIES C. Difficile assays are also worth a mention. Luminex also gained CE-IVD mark for Norovirus and C. Difficile.
Recently, the company witnessed significant developments in its VERIGENE platform. On the international front, Japan's Central Social Insurance Medical Council has approved the recommendation by the Japanese Ministry of Health, Labor and Welfare to provide reimbursement for two VERIGENE assays — The Gram-Positive Blood Culture (BC-GP) test and the Gram-Negative Blood Culture (BC-GN) test.
In the past year, Luminex has underperformed the broader industry. The stock has returned 7.8%, compared with the industry’s rally of 23.5%.
Additionally, the company may be impacted by changes to the reimbursement landscape. It has been experiencing a drop in lab customer traffic, owing to the new molecular diagnostic code system established by the Centers for Medicare and Medicaid Services. This has also dented the company’s Assay revenues.
Luminex operates in a market characterized by rapid and continuous technological innovation. Intense competition in the niche space adds to the woes.
Zacks Rank & Key Picks
Luminex carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Centene Corporation (CNC - Free Report) , Haemonetics Corporation (HAE - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Centene projects long-term growth rate of 14.4%. In the last six months, the stock has returned 16.3%.
Haemonetics has an expected long-term growth rate of 10.8%. In the past month, the stock has returned 4.9%.
HCA Healthcare has an expected long-term growth rate of 11.5%. In the past month, the stock has returned 8.7%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>