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Meridian Bioscience is a $1 billion provider of diagnostic test kits for gastrointestinal and respiratory infectious diseases. The company is expected to grow sales 32% this year to $335 million.
And after reporting a strong beat-and-raise quarter last week, analysts had to boost their EPS estimates over 30% from $1.24 to $1.63. So VIVO is back to a Zacks #1 Rank, sporting a projected 52% rise in profits.
I wrote about VIVO in early January and said it wasn't too late for investors to grab hold of this profit rocket near $20 per share...
"Bottom line on VIVO: I always pay attention to small companies growing their sales rapidly as they could become acquisition targets by larger biopharma or MedTech players. Buying VIVO near $20 offers excellent risk/reward, with or without an M&A suitor."
And then last week, right before the company report, I produced a video and article where I talked about why the COVID-19 testing stocks were under-appreciated given their fantastic growth...
Well here we are as VIVO pushed to 13-year highs above $30 with the earnings surprise and strong upside guidance.
Following the quarterly report, Piper Sandler analyst Steven Mah, a consistently bullish VIVO fan, raised his price target on Meridian Bioscience to $34 from $26 and reiterated an Overweight rating. Mah believes the company guidance was once again "very conservative" citing management's "pragmatic approach given the limited visibility on the durability of COVID-19 tailwinds."
Mah explained his increased confidence in Meridian's longer-term COVID-19 tailwinds given the Biden Administration's testing stance, slower than expected vaccine rollout, and new strain emergence.
Meridian Under the Microscope
Meridian Bioscience develops, manufactures, distributes, and sells diagnostic test kits primarily for gastrointestinal and respiratory infectious diseases, and elevated blood lead levels worldwide. The company operates through Diagnostics and Life Science segments. They describe their mission as helping providers make better diagnostic decisions with a focus on gastrointestinal, neonatal, pediatrics, and respiratory conditions.
The Diagnostics segment offers testing platforms, including real-time PCR (polymerase chain reaction) amplification under the Revogene brand; isothermal DNA amplification under the Alethia brand; lateral flow immunoassay using fluorescent chemistry under the Curian brand; rapid immunoassay under the ImmunoCard and ImmunoCard STAT! brands; enzyme-linked immunoassays under the PREMIER brand; anodic stripping voltammetry under the LeadCare and PediaStat brands; and urea breath testing for H. pylori under the BreathID brand.
Diagnostic Players Find New Life Under COVID
I have written often in the past few months of specialized diagnostic companies like Quidel (QDEL - Free Report) and Hologic (HOLX - Free Report) as they build new revenue streams from SARS-CoV-2 testing. These revenue streams are likely sustainable as the virus mutates and requires modified tests.
And I recently bought shares of VIVO for the Zacks Healthcare Innovators portfolio because I liked the growth outlook for this small player in a rapidly expanding market for rapid diagnostics -- including coronavirus testing which will continue to be part of our lives for years to come, even with vaccines.
While Meridian Bioscience is a David among diagnostic Goliaths, its long and fascinating history surprised me. From the company website...
In 1977, Bill Motto founded Meridian Bioscience on a $500 investment in his Cincinnati home’s basement. Meridian’s first product was distributing a rapid fungal test developed by the University of Kentucky. While calling on his hospital and research customers, Bill noticed there was no easy, clean way to transport patient samples. He developed the innovative Para-Pak stool transport system to meet this need.
As the product line grew, so did Meridian’s research and development, leading to a breakthrough in 1982 with a 10-minute rapid test for strep throat. Before the Meridian test, doctors would have to wait for two to three days for a culture result. Innovation continued as the company brought several cutting edge diagnostic technologies to market, including a DNA testing platform and first-of-their-kind tests for C. difficile, E. coli, H. pylori amongst others.
The new bottom line on VIVO: I continue to hold the shares and would recommend new positions between $25 and $27 looking for new bull market highs above $30 by June.
Disclosure: I own shares of QDEL, HOLX, and VIVO for the Zacks Healthcare Innovators portfolio.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Bull of the Day: Meridian Bioscience (VIVO)
Meridian Bioscience is a $1 billion provider of diagnostic test kits for gastrointestinal and respiratory infectious diseases. The company is expected to grow sales 32% this year to $335 million.
And after reporting a strong beat-and-raise quarter last week, analysts had to boost their EPS estimates over 30% from $1.24 to $1.63. So VIVO is back to a Zacks #1 Rank, sporting a projected 52% rise in profits.
I wrote about VIVO in early January and said it wasn't too late for investors to grab hold of this profit rocket near $20 per share...
"Bottom line on VIVO: I always pay attention to small companies growing their sales rapidly as they could become acquisition targets by larger biopharma or MedTech players. Buying VIVO near $20 offers excellent risk/reward, with or without an M&A suitor."
And then last week, right before the company report, I produced a video and article where I talked about why the COVID-19 testing stocks were under-appreciated given their fantastic growth...
Biotech Bonanza: COVID Launches Science at Warp Speed
Well here we are as VIVO pushed to 13-year highs above $30 with the earnings surprise and strong upside guidance.
Following the quarterly report, Piper Sandler analyst Steven Mah, a consistently bullish VIVO fan, raised his price target on Meridian Bioscience to $34 from $26 and reiterated an Overweight rating. Mah believes the company guidance was once again "very conservative" citing management's "pragmatic approach given the limited visibility on the durability of COVID-19 tailwinds."
Mah explained his increased confidence in Meridian's longer-term COVID-19 tailwinds given the Biden Administration's testing stance, slower than expected vaccine rollout, and new strain emergence.
Meridian Under the Microscope
Meridian Bioscience develops, manufactures, distributes, and sells diagnostic test kits primarily for gastrointestinal and respiratory infectious diseases, and elevated blood lead levels worldwide. The company operates through Diagnostics and Life Science segments. They describe their mission as helping providers make better diagnostic decisions with a focus on gastrointestinal, neonatal, pediatrics, and respiratory conditions.
The Diagnostics segment offers testing platforms, including real-time PCR (polymerase chain reaction) amplification under the Revogene brand; isothermal DNA amplification under the Alethia brand; lateral flow immunoassay using fluorescent chemistry under the Curian brand; rapid immunoassay under the ImmunoCard and ImmunoCard STAT! brands; enzyme-linked immunoassays under the PREMIER brand; anodic stripping voltammetry under the LeadCare and PediaStat brands; and urea breath testing for H. pylori under the BreathID brand.
Diagnostic Players Find New Life Under COVID
I have written often in the past few months of specialized diagnostic companies like Quidel (QDEL - Free Report) and Hologic (HOLX - Free Report) as they build new revenue streams from SARS-CoV-2 testing. These revenue streams are likely sustainable as the virus mutates and requires modified tests.
And I recently bought shares of VIVO for the Zacks Healthcare Innovators portfolio because I liked the growth outlook for this small player in a rapidly expanding market for rapid diagnostics -- including coronavirus testing which will continue to be part of our lives for years to come, even with vaccines.
While Meridian Bioscience is a David among diagnostic Goliaths, its long and fascinating history surprised me. From the company website...
In 1977, Bill Motto founded Meridian Bioscience on a $500 investment in his Cincinnati home’s basement. Meridian’s first product was distributing a rapid fungal test developed by the University of Kentucky. While calling on his hospital and research customers, Bill noticed there was no easy, clean way to transport patient samples. He developed the innovative Para-Pak stool transport system to meet this need.
As the product line grew, so did Meridian’s research and development, leading to a breakthrough in 1982 with a 10-minute rapid test for strep throat. Before the Meridian test, doctors would have to wait for two to three days for a culture result. Innovation continued as the company brought several cutting edge diagnostic technologies to market, including a DNA testing platform and first-of-their-kind tests for C. difficile, E. coli, H. pylori amongst others.
The new bottom line on VIVO: I continue to hold the shares and would recommend new positions between $25 and $27 looking for new bull market highs above $30 by June.
Disclosure: I own shares of QDEL, HOLX, and VIVO for the Zacks Healthcare Innovators portfolio.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>