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Here's Why You Should Retain Luminex (LMNX) Stock for Now
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Luminex Corporation is well poised for growth, backed by a solid product portfolio and a strong momentum of its Aries platform. However, intense competition is persistently offsetting the positives to some extent.
Shares of Luminex have gained 31.2% compared with the industry’s rally of 1.1% over the past three months.
Luminex, with a market capitalization of $1.51 billion, develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. It anticipates an earnings improvement of 27.8% over the next year. It has a trailing four-quarter average earnings miss of 2.8%.
Let’s take a closer look at the factors that substantiate the company’s current Zacks Rank #3 (Hold) status.
Strong Product Portfolio: Luminex has a broad product portfolio that comprises advanced xMAP, xTAG and Multi Code technologies. Per management, 2020 has been a transformative year for the company owing to three product launches.
In 2020, the company placed more than 970 multiplexing systems excluding ARIES and VERIGENE systems. Consumable revenues grew 11% to $13 million for the fourth quarter. This increase was driven by higher non-bulk purchases from partners. Royalty revenues were $13.9 million for the quarter, up 3% year over year.
The Aries Platform: Luminex is making a noteworthy progress with another major product the ARIES system, which represents a major revenue opportunity for the company. The company is focused on fortifying its market leadership in infectious disease with sample-to-answer platform, the ARIES system.
Through the fourth quarter of 2020, the company also expanded its manufacturing capabilities significantly with a fourfold increase in ARIES manufacturing capacity and a ninefold increase in xMAP manufacturing capacity. Completion of its ARIES expansion to a capacity of around 5 million tests per year is expected to be the primary growth driver. On the ARIES front, the company ramped up very quickly from the first two quarters of 2020 as it attained maximum production capacity and plans to double or continue to expand it.
In February 2021, management announced that it received $11.3 million in funding from the BARDA. These funds will lead to rapid development and validation of a respiratory panel combining Flu A/B & respiratory syncytial virus (RSV) targets with the SARS-CoV-2 target that can be run on all ARIES Systems.
In our opinion, approval for Luminex’s products in the international markets will further strengthen the company’s pipeline, which should help it gain significant top-line growth over the long haul.
What’s Deterring the Stock?
Luminex operates in the highly fragmented life sciences industry. The industry is characterized by a fast and steady technological innovation. Currently, it is facing stiff rivalry in the respiratory market.
Estimate Trend
For 2021, the Zacks Consensus Estimate for revenues is pegged at $479.9 million, indicating an improvement of 14.9% from the prior-year reported figure. The same for earnings stands at 90 cents per share, suggesting whopping growth of 181.3% from the year-ago reported figure.
Align Technology has a projected long-term earnings growth rate of 19%.
Abbott has a projected long-term earnings growth rate of 14.1%.
Hologic has an estimated long-term earnings growth rate of 15.4%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Here's Why You Should Retain Luminex (LMNX) Stock for Now
Luminex Corporation is well poised for growth, backed by a solid product portfolio and a strong momentum of its Aries platform. However, intense competition is persistently offsetting the positives to some extent.
Shares of Luminex have gained 31.2% compared with the industry’s rally of 1.1% over the past three months.
Luminex, with a market capitalization of $1.51 billion, develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. It anticipates an earnings improvement of 27.8% over the next year. It has a trailing four-quarter average earnings miss of 2.8%.
Let’s take a closer look at the factors that substantiate the company’s current Zacks Rank #3 (Hold) status.
Strong Product Portfolio: Luminex has a broad product portfolio that comprises advanced xMAP, xTAG and Multi Code technologies. Per management, 2020 has been a transformative year for the company owing to three product launches.
In 2020, the company placed more than 970 multiplexing systems excluding ARIES and VERIGENE systems. Consumable revenues grew 11% to $13 million for the fourth quarter. This increase was driven by higher non-bulk purchases from partners. Royalty revenues were $13.9 million for the quarter, up 3% year over year.
The Aries Platform: Luminex is making a noteworthy progress with another major product the ARIES system, which represents a major revenue opportunity for the company. The company is focused on fortifying its market leadership in infectious disease with sample-to-answer platform, the ARIES system.
Through the fourth quarter of 2020, the company also expanded its manufacturing capabilities significantly with a fourfold increase in ARIES manufacturing capacity and a ninefold increase in xMAP manufacturing capacity. Completion of its ARIES expansion to a capacity of around 5 million tests per year is expected to be the primary growth driver. On the ARIES front, the company ramped up very quickly from the first two quarters of 2020 as it attained maximum production capacity and plans to double or continue to expand it.
In February 2021, management announced that it received $11.3 million in funding from the BARDA. These funds will lead to rapid development and validation of a respiratory panel combining Flu A/B & respiratory syncytial virus (RSV) targets with the SARS-CoV-2 target that can be run on all ARIES Systems.
In our opinion, approval for Luminex’s products in the international markets will further strengthen the company’s pipeline, which should help it gain significant top-line growth over the long haul.
What’s Deterring the Stock?
Luminex operates in the highly fragmented life sciences industry. The industry is characterized by a fast and steady technological innovation. Currently, it is facing stiff rivalry in the respiratory market.
Estimate Trend
For 2021, the Zacks Consensus Estimate for revenues is pegged at $479.9 million, indicating an improvement of 14.9% from the prior-year reported figure. The same for earnings stands at 90 cents per share, suggesting whopping growth of 181.3% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Align Technology (ALGN - Free Report) , Abbott Laboratories (ABT - Free Report) and Hologic (HOLX - Free Report) . While Align Technology currently sports a Zacks Rank #1 (Strong Buy), the other two presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has a projected long-term earnings growth rate of 19%.
Abbott has a projected long-term earnings growth rate of 14.1%.
Hologic has an estimated long-term earnings growth rate of 15.4%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>