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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 24.5% against the industry’s decline of 7.7% in the past three months.
Luminex with a market capitalization of $1.58 billion develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. Although the company anticipates an earnings improvement of 30.4% over the next year, it has a trailing four-quarter earnings miss of 2.8%, on average.
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.
In 2020, the company placed more than 970 multiplexing systems excluding ARIES and VERIGENE systems. Consumable revenues grew 11% to $13 million in the fourth quarter of 2020. This increase was driven by higher non-bulk purchases from partners. Royalty revenues were $13.9 million in the period, up 3% year over year.
In March 2021, the company received the FDA EUA for a new expanded version of its NxTAG Respiratory Pathogen Panel (RPP) that includes the SARS-CoV-2 virus for high-throughput respiratory testing.
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. It is focused on fortifying its market leadership in the infectious disease space with the sample-to-answer platform of 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 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 with the same.
In February 2021, management announced that it received $11.3 million in funding from the BARDA. These funds will lead to the 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 March, the company announced that it submitted for an FDA EUA of its new multi-analyte respiratory panel combining the Flu A/B and respiratory syncytial virus (RSV) targets with the SARS-CoV-2 target.
In our opinion, the 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, which 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 91 cents per share, suggesting whopping growth of 187.5% from the year-ago reported number.
Align Technology has a projected long-term earnings growth rate of 19%.
Surmodics has a projected long-term earnings growth rate of 10%.
Veeva has an estimated long-term earnings growth rate of 14.5%.
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 24.5% against the industry’s decline of 7.7% in the past three months.
Luminex with a market capitalization of $1.58 billion develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. Although the company anticipates an earnings improvement of 30.4% over the next year, it has a trailing four-quarter earnings miss of 2.8%, on average.
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.
In 2020, the company placed more than 970 multiplexing systems excluding ARIES and VERIGENE systems. Consumable revenues grew 11% to $13 million in the fourth quarter of 2020. This increase was driven by higher non-bulk purchases from partners. Royalty revenues were $13.9 million in the period, up 3% year over year.
In March 2021, the company received the FDA EUA for a new expanded version of its NxTAG Respiratory Pathogen Panel (RPP) that includes the SARS-CoV-2 virus for high-throughput respiratory testing.
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. It is focused on fortifying its market leadership in the infectious disease space with the sample-to-answer platform of 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 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 with the same.
In February 2021, management announced that it received $11.3 million in funding from the BARDA. These funds will lead to the 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 March, the company announced that it submitted for an FDA EUA of its new multi-analyte respiratory panel combining the Flu A/B and respiratory syncytial virus (RSV) targets with the SARS-CoV-2 target.
In our opinion, the 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, which 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 91 cents per share, suggesting whopping growth of 187.5% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Align Technology (ALGN - Free Report) , Surmodics (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) . While Align Technology and Surmodics currently sport a Zacks Rank #1 (Strong Buy), the other one presently carries 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%.
Surmodics has a projected long-term earnings growth rate of 10%.
Veeva has an estimated long-term earnings growth rate of 14.5%.
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 >>