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3 Reasons to Hold QuidelOrtho (QDEL) Stock in Your Portfolio
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QuidelOrtho Corporation (QDEL - Free Report) is well poised for growth in the coming quarters, backed by its strong product portfolio and with a few product launches. However, headwinds due to third-party reimbursement policies and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 39.4% compared with 43.9% fall of the industry and the S&P 500's 19.4% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.48 billion. QuidelOrtho’s earnings yield of 14.8% compares favorably with the industry’s negative yield. QuidelOrtho’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average surprise being 137.1%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which are sold directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter (OTC) use. The company has also begun to reach significant new markets as it introduced its QuickVue At-Home OTC COVID-19 test following the reopening of schools and at many other locations.
Product Launch: We are upbeat about numerous product launches by QuidelOrtho over the past few months. On the second-quarter 2022 earnings call in August, the company confirmed that it had launched seven new assets globally in its labs business unit. The most notable was the U.S. launch of hemoglobin A1c, which has been registering very strong demand and significant opportunities in QuidelOrtho’s sales funnel. The company expects to continue launching new products in the United States in the rest of 2022.
Strong Q2 Results: QuidelOrtho’s robust second-quarter 2022 results buoy optimism. The company recorded robust overall top-line performance. The company registered strong revenues from the majority of its four business units, along with robust geographical performances. Solid revenues from QuidelOrtho’s three categories (Recurring, Instrument and QuickVue) were also promising. Expansion of adjusted operating margin bodes well for the stock.
Downsides
Third-Party Reimbursement Policies: The end users of QuidelOrtho’s Point-of-Care products are primarily physicians and other healthcare providers. In the United States, healthcare providers, like hospitals and physicians, who purchase diagnostic products generally rely on third-party payers to reimburse all or part of the cost of the procedure. The use of QuidelOrtho’s products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of the company’s products from their patients’ third-party payers.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests and is expected to remain a significant portion of the company’s total revenues, at least in the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results would be affected.
Estimates Trend
In the past 30 days, the Zacks Consensus Estimate for its 2022 earnings has been stable at $12.12.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $655.2 million, suggesting a 28.5% improvement from the year-ago quarter’s reported number.
ShockWave Medical’s earnings per share estimates have improved from $2.02 to $2.57 for 2022 and from $2.95 to $3.42 for 2023 in the past 60 days. SWAV has gained 63.4% so far this year.
ShockWave Medical delivered an earnings surprise of 180.14%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $10.41 to $11.26 for 2022 and $7.94 to $8.30 for 2023 in the past 60 days. AMN stock has declined 12.8% so far this year.
AMN Healthcare Services delivered an earnings surprise of 15.66%, on average, in the last four quarters.
McKesson’s earnings per share estimates have improved from $23.26 to $24.25 for fiscal 2023 and $25.41 to $26.04 for fiscal 2024 in the past 60 days. MCK has gained 37.4% so far this year.
McKesson delivered an earnings surprise of 13.00%, on average, in the last four quarters.
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3 Reasons to Hold QuidelOrtho (QDEL) Stock in Your Portfolio
QuidelOrtho Corporation (QDEL - Free Report) is well poised for growth in the coming quarters, backed by its strong product portfolio and with a few product launches. However, headwinds due to third-party reimbursement policies and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 39.4% compared with 43.9% fall of the industry and the S&P 500's 19.4% decline.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.48 billion. QuidelOrtho’s earnings yield of 14.8% compares favorably with the industry’s negative yield. QuidelOrtho’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average surprise being 137.1%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which are sold directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter (OTC) use. The company has also begun to reach significant new markets as it introduced its QuickVue At-Home OTC COVID-19 test following the reopening of schools and at many other locations.
Product Launch: We are upbeat about numerous product launches by QuidelOrtho over the past few months. On the second-quarter 2022 earnings call in August, the company confirmed that it had launched seven new assets globally in its labs business unit. The most notable was the U.S. launch of hemoglobin A1c, which has been registering very strong demand and significant opportunities in QuidelOrtho’s sales funnel. The company expects to continue launching new products in the United States in the rest of 2022.
Strong Q2 Results: QuidelOrtho’s robust second-quarter 2022 results buoy optimism. The company recorded robust overall top-line performance. The company registered strong revenues from the majority of its four business units, along with robust geographical performances. Solid revenues from QuidelOrtho’s three categories (Recurring, Instrument and QuickVue) were also promising. Expansion of adjusted operating margin bodes well for the stock.
Downsides
Third-Party Reimbursement Policies: The end users of QuidelOrtho’s Point-of-Care products are primarily physicians and other healthcare providers. In the United States, healthcare providers, like hospitals and physicians, who purchase diagnostic products generally rely on third-party payers to reimburse all or part of the cost of the procedure. The use of QuidelOrtho’s products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of the company’s products from their patients’ third-party payers.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests and is expected to remain a significant portion of the company’s total revenues, at least in the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results would be affected.
Estimates Trend
In the past 30 days, the Zacks Consensus Estimate for its 2022 earnings has been stable at $12.12.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $655.2 million, suggesting a 28.5% improvement from the year-ago quarter’s reported number.
QuidelOrtho Corporation Price
QuidelOrtho Corporation price | QuidelOrtho Corporation Quote
Stocks to Consider
Some better-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , AMN Healthcare Services (AMN - Free Report) and McKesson (MCK - Free Report) . While ShockWave Medical and AMN Healthcare Services sport a Zacks Rank #1 (Strong Buy), McKesson carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ShockWave Medical’s earnings per share estimates have improved from $2.02 to $2.57 for 2022 and from $2.95 to $3.42 for 2023 in the past 60 days. SWAV has gained 63.4% so far this year.
ShockWave Medical delivered an earnings surprise of 180.14%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $10.41 to $11.26 for 2022 and $7.94 to $8.30 for 2023 in the past 60 days. AMN stock has declined 12.8% so far this year.
AMN Healthcare Services delivered an earnings surprise of 15.66%, on average, in the last four quarters.
McKesson’s earnings per share estimates have improved from $23.26 to $24.25 for fiscal 2023 and $25.41 to $26.04 for fiscal 2024 in the past 60 days. MCK has gained 37.4% so far this year.
McKesson delivered an earnings surprise of 13.00%, on average, in the last four quarters.