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Here's Why You Should Retain PerkinElmer (PKI) Stock Now
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PerkinElmer, Inc. is well-poised for growth backed by robust product portfolio and impressive margin expansion. However, forex remains a concern.
The stock has gained 68.1% compared with the industry’s growth of 58.8% in a year’s time. Also, the S&P 500 Index has rallied 55.2% in the same time frame.
PerkinElmer — with a market capitalization of $14.10 billion — offers scientific instruments, consumables, and services to pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide. It anticipates earnings to improve 19.5% over the next five years. Moreover, the company has a trailing four-quarter earnings surprise 42.1%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
Factor Hurting the Stock
Growing exposure to the international markets enhances the risk of foreign exchange volatility. The fluctuations in currency exchange rates can adversely impact PerkinElmer’s international sales.
Key Catalysts
PerkinElmer delivers a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way.
Per management, PerkinElmer spent an incremental $25 million in people and digital capabilities and invested above $200 million in R&D. This will enable the company to continue building a robust pipeline of new products across a full suite of technologies.
With respect to COVID-related new product launches and approvals, PerkinElmer received CE marking for a multi-analyte PCAM respiratory SARS-CoV-2 RT-PCR panel for the direct identification of COVID-19 influenza A, influenza B and Respiratory Syncytial Virus, RSV, in a single test ahead of the upcoming flu season.
The company’s gross and operating margin continues to improve primarily on the back of productivity initiatives and volume leverage. The new product introductions are expected to improve product mix thereby enhancing gross margin. This coupled with stringent cost control will continue to drive operating margin in the near term.
In the fourth quarter of 2020, adjusted gross profit in the quarter amounted to $853 million, up 101.9% year over year. Adjusted gross margin, as a percentage of revenues was 62.9%, up 1050 basis points (bps) year over year. Adjusted operating income was $571.2 million, which skyrocketed 197% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues was 42.2%, up 1830 bps.
Estimates Trend
For 2021, the Zacks Consensus Estimate for revenues is pegged at $4.09 billion, indicating growth of 8.1% from the year-ago period. The same for adjusted earnings per share stands at $8.52, suggesting an improvement of 2.7% from the prior-year reported figure.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is projected at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Here's Why You Should Retain PerkinElmer (PKI) Stock Now
PerkinElmer, Inc. is well-poised for growth backed by robust product portfolio and impressive margin expansion. However, forex remains a concern.
The stock has gained 68.1% compared with the industry’s growth of 58.8% in a year’s time. Also, the S&P 500 Index has rallied 55.2% in the same time frame.
PerkinElmer — with a market capitalization of $14.10 billion — offers scientific instruments, consumables, and services to pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide. It anticipates earnings to improve 19.5% over the next five years. Moreover, the company has a trailing four-quarter earnings surprise 42.1%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
Factor Hurting the Stock
Growing exposure to the international markets enhances the risk of foreign exchange volatility. The fluctuations in currency exchange rates can adversely impact PerkinElmer’s international sales.
Key Catalysts
PerkinElmer delivers a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way.
Per management, PerkinElmer spent an incremental $25 million in people and digital capabilities and invested above $200 million in R&D. This will enable the company to continue building a robust pipeline of new products across a full suite of technologies.
With respect to COVID-related new product launches and approvals, PerkinElmer received CE marking for a multi-analyte PCAM respiratory SARS-CoV-2 RT-PCR panel for the direct identification of COVID-19 influenza A, influenza B and Respiratory Syncytial Virus, RSV, in a single test ahead of the upcoming flu season.
The company’s gross and operating margin continues to improve primarily on the back of productivity initiatives and volume leverage. The new product introductions are expected to improve product mix thereby enhancing gross margin. This coupled with stringent cost control will continue to drive operating margin in the near term.
In the fourth quarter of 2020, adjusted gross profit in the quarter amounted to $853 million, up 101.9% year over year. Adjusted gross margin, as a percentage of revenues was 62.9%, up 1050 basis points (bps) year over year. Adjusted operating income was $571.2 million, which skyrocketed 197% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues was 42.2%, up 1830 bps.
Estimates Trend
For 2021, the Zacks Consensus Estimate for revenues is pegged at $4.09 billion, indicating growth of 8.1% from the year-ago period. The same for adjusted earnings per share stands at $8.52, suggesting an improvement of 2.7% from the prior-year reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Hologic, Inc. (HOLX - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Abbott Laboratories (ABT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is estimated at 15.4%.
IDEXX’s long-term earnings growth rate is projected at 15.8%.
Abbott’s long-term earnings growth rate is estimated at 14.1%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>