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On Mar 23, we issued an updated research report on Luminex Corporation . The company has a broad product portfolio, which comprises advanced xMAP, xTAG and MultiCode technology. However, the company operates in the highly competitive life sciences industry.
Luminex carries a Zacks Rank #3 (Hold).
Portfolio Strength Buoys Optimism
Luminex’s large installed instrument base consists of the Luminex 100 (LX100), Luminex 200 (LX200), FlexMap 3D systems and the MAGPIX technology. The company widened and accelerated market acceptance of its xMAP technology through development, marketing and distribution partnerships with leading companies in the life sciences markets.
Luminex’s molecular portfolio will soon include the next gen VERIGENE 2 system. The company will continue to target clinical trial commencement for the system and expects a GI panel by the end of the second quarter of fiscal 2018.
A comprehensive format incorporating many additional clinical studies on VERIGENE and other molecular platforms will follow in 2018 and beyond. Additionally, management expects its license technology group to continue to generate LT mid-single digit annual revenue growth, while contributing to profits.
Further, Luminex is making noteworthy progress with another major product — the ARIES system — which represents a major revenue opportunity. The company is focused on fortifying market leadership in infectious disease with the ARIES system, which is a sample to answer platform.
In the fourth quarter, increasing volumes of VERIGENE, ARIES and internal manufacturing process improvements led to a significant improvemnet in gross margin. Further, net revenues from these two platforms were $47 million in 2017. Management expects it to grow at a high rate, consequently making it feasible to achieve its goal of exiting 2019 on $100 million a year rate.
Headwinds
On the flip side, Luminex faces cutthroat competition in the niche space at the moment. The industry is characterized by rapid and continuous technological innovation.
Adding to the woes, Luminex’s prospects are likely to be marred by future changes in the reimbursement landscape. Per the new molecular diagnostic code system established by the Centers for Medicare and Medicaid Services ("CMS") recently, the Protecting Access to Medicare Act (PAMA) will require clinical laboratories to report to CMS the volume of each laboratory test and the price paid by private payors. This has led to a drop in Luminex’s customer base.
Unfavorable Price Movement
Luminex has underperformed its industry in the past year.
Notably, the stock has gained 6.7%, comparing unfavorably with the industry’s growth of 68.4%.
Further, the current level is significantly lower than S&P 500 Index’s rally of 101.7%. Decline in consumable revenues and stiff competition continue to dampen the stock’s performance.
Key Picks
A few better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and PerkinElmer .
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Luminex (LMNX) Product Portfolio Solid, Competition Rife
On Mar 23, we issued an updated research report on Luminex Corporation . The company has a broad product portfolio, which comprises advanced xMAP, xTAG and MultiCode technology. However, the company operates in the highly competitive life sciences industry.
Luminex carries a Zacks Rank #3 (Hold).
Portfolio Strength Buoys Optimism
Luminex’s large installed instrument base consists of the Luminex 100 (LX100), Luminex 200 (LX200), FlexMap 3D systems and the MAGPIX technology. The company widened and accelerated market acceptance of its xMAP technology through development, marketing and distribution partnerships with leading companies in the life sciences markets.
Luminex’s molecular portfolio will soon include the next gen VERIGENE 2 system. The company will continue to target clinical trial commencement for the system and expects a GI panel by the end of the second quarter of fiscal 2018.
A comprehensive format incorporating many additional clinical studies on VERIGENE and other molecular platforms will follow in 2018 and beyond. Additionally, management expects its license technology group to continue to generate LT mid-single digit annual revenue growth, while contributing to profits.
Further, Luminex is making noteworthy progress with another major product — the ARIES system — which represents a major revenue opportunity. The company is focused on fortifying market leadership in infectious disease with the ARIES system, which is a sample to answer platform.
Luminex Corporation Price and Consensus
Luminex Corporation Price and Consensus | Luminex Corporation Quote
In the fourth quarter, increasing volumes of VERIGENE, ARIES and internal manufacturing process improvements led to a significant improvemnet in gross margin. Further, net revenues from these two platforms were $47 million in 2017. Management expects it to grow at a high rate, consequently making it feasible to achieve its goal of exiting 2019 on $100 million a year rate.
Headwinds
On the flip side, Luminex faces cutthroat competition in the niche space at the moment. The industry is characterized by rapid and continuous technological innovation.
Adding to the woes, Luminex’s prospects are likely to be marred by future changes in the reimbursement landscape. Per the new molecular diagnostic code system established by the Centers for Medicare and Medicaid Services ("CMS") recently, the Protecting Access to Medicare Act (PAMA) will require clinical laboratories to report to CMS the volume of each laboratory test and the price paid by private payors. This has led to a drop in Luminex’s customer base.
Unfavorable Price Movement
Luminex has underperformed its industry in the past year.
Notably, the stock has gained 6.7%, comparing unfavorably with the industry’s growth of 68.4%.
Further, the current level is significantly lower than S&P 500 Index’s rally of 101.7%. Decline in consumable revenues and stiff competition continue to dampen the stock’s performance.
Key Picks
A few better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and PerkinElmer .
Bio-Rad Laboratories sports a Zacks Rank of #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>