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Luminex (LMNX) Down 34.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Luminex (LMNX - Free Report) . Shares have lost about 34.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Luminex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Luminex Q2 Earnings Beat Estimates, Revenues Miss

Luminex Corporation reported second-quarter 2020 adjusted earnings of 27 cent per share , beating the Zacks Consensus Estimate of 8 cents. The company reported  loss per share of 11 cents in the year-ago period.

Revenues came in at $109.5 million, missing  the Zacks Consensus Estimate by a marginal 0.1%. However, the top line improved 31.8% on a year-over-year basis.

Total sample-to-answer molecular diagnostics revenues grew  more than 100% from the prior-year quarter.

Segmental Analysis

System Sales

Revenues at this segment totaled $15.5 million, declined 16.7% from the year-ago quarter.

Consumable Sales

This segment accounted for $11.3 million of revenues, down 11% year over year.

Royalty Revenues

Royalty revenues totaled $12.1 million, down 5.5% on a year-over-year basis.

Assay Revenues

This segment reported revenues worth $61.2 million, up 94.9% on a year-over-year basis.

Service Revenues

Revenues in the segment amounted to $5.5 million, down 8.3% from the year-ago quarter.

Other

Other revenues came in at $3.9 million, up 160% from the prior-year quarter.

Financial Update

The company exited second quarter with cash and cash equivalents totaled $291.7 million, up from $43.1 million on a sequential basis.

Cumulative net cash provided by operating activitiesat the end of second quarter of 2020, came in at $24.1 million, against cumulative net cash used in  operating activities of $1.2 million in the year-ago period.

Margins

Gross profit in the reported quarter was $69.7 million, up 54.1% year over year. Gross margin was 63.6%, expanding 917 (basis points) bps.

The company reported adjusted operating profit of $21.6 million, against the year-ago quarter’s adjusted operating loss of $2.9 million. Adjusted operating margin came in at 19.7%, an expansion of 2324 bps.

2020 Guidance

Luminex projects third-quarter 2020 revenue to be at or above $100 million, reflecting growth above 26% from figure reported in third quarter 2019.The Zacks Consensus estimate for the same is pegged at $93.3 million.

Revenue for the full -year 2020 is estimated to be at or above $415 million, reflecting growth over 24% from figure reported in 2019. The Zacks Consensus estimate for the same is pegged at $407.4 million.

It is important to note here that the company expects to present an updated full-year revenue outlook in its third-quarter earnings release.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 937.5% due to these changes.

VGM Scores

At this time, Luminex has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Luminex has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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