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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, courtesy of a robust product portfolio and impressive margin expansion. However, forex remains concerning.
Shares of this Zacks Rank #3 (Hold) company have lost 2.4% against the industry’s growth of 8.1% in the past six months. The S&P 500 Index has fallen 0.9% in the same time frame.
PerkinElmer, with a market capitalization of $17.7 billion, offers scientific instruments, consumables and services to pharmaceutical, biomedical, environmental testing, chemical and general industrial markets worldwide. Its earnings are anticipated to improve 46.5% over the next five years. The company pulled off a trailing four-quarter earnings surprise of 12.82%, on average.
Image Source: Zacks Investment Research
Key Catalysts
PerkinElmer provides a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way.
In November, PerkinElmer launched ready-to-use Adeno-associated Virus Vectors (AAV) Detection Kits to aid researchers working on gene therapies for various serious diseases. The validated and fully-automatable assays are built on PerkinElmer's proprietary AlphaLISA technology.
The launch will likely expand PerkinElmer's cell and gene therapy portfolio, which includes gene editing and modulation, cell counting, antibody and flow cytometry innovations. This will enable the company to significantly strengthen its Life Sciences business unit in the broader Discovery & Analytical Solutions segment.
PerkinElmer received the FDA’s marketing authorization for the assay kit for in vitro diagnostic (IVD) use by certified laboratories for the simultaneous detection of spinal muscular atrophy (SMA) and severe combined immunodeficiency (SCID) in newborns — EONIS SCID-SMA. PerkinElmer’s Oxford Immunotec announced that the FDA approved the use of the T-Cell Select reagent kit to automate its T-SPOT.TB test workflow for IVD use by certified laboratories in September.
The latest regulatory clearances are likely to aid PerkinElmer in significantly solidifying its foothold in the global IVD space and boosting its Diagnostics business.
The company launched a unique benchtop platform, Cellaca PLX Image Cytometry System, in September. The system is expected to enable researchers to evaluate multiple Critical Quality Attributes of cell samples in a single automated workflow, including cell identity, quality and quantity.
The company’s gross margin has been improving on the back of productivity initiatives and volume leverage. The product introductions are anticipated to enhance the product mix, increasing the gross margin. This, coupled with stringent cost control, will continue to drive the operating margin in the near term.
On the third-quarter 2022 earnings call, the company demonstrated a solid performance despite ongoing macro headwinds like inflationary pressure. Pro-forma adjusted revenues, which include sales from held-for-sale business — Applied, Food and Enterprise Services, were up 9% organically after the exclusion of revenue growth sales from COVID-19 products. Revenues from continuing operations were down 17% year over year and 23% organically.
Factor Hurting the Stock
Growing exposure to the international markets makes the company susceptible to foreign exchange volatility. The unfavorable fluctuations in currency exchange rates can hurt PerkinElmer’s international sales. In the third quarter, foreign exchange created a 6% headwind to revenues.
For the fourth quarter of 2022, the company projects a 7% headwind from foreign exchange and 5% for 2022. Its adjusted gross margin decreased 110 basis points to 64% during the third quarter. The company’s adjusted operating margin was also down 600 basis points to 31.4%.
PerkinElmer has been witnessing an upward estimate revision trend for 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved 3.2% south to $5.91.
The Zacks Consensus Estimate for first-quarter 2023 revenues is pegged at $997 million, suggesting a decline of 20.8% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Mesa Laboratories (MLAB - Free Report) and Cardinal Health (CAH - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.96%.
AMN Healthcare has gained 52.7% compared with the industry’s 2.3% increase in the past six months.
Mesa Laboratories, sporting a Zacks Rank #1 at present, has an estimated growth rate of 28.9% for fiscal 2023. MLAB’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 16.56%.
Mesa Laboratories has declined 15.9% against the industry’s 2.2% increase in the past six months.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.2%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 3.04%.
Cardinal Health has gained 46.8% compared with the industry’s 4.1% increase over the past six months.
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Here's Why You Should Retain PerkinElmer (PKI) Stock Now
PerkinElmer, Inc. is well-poised for growth, courtesy of a robust product portfolio and impressive margin expansion. However, forex remains concerning.
Shares of this Zacks Rank #3 (Hold) company have lost 2.4% against the industry’s growth of 8.1% in the past six months. The S&P 500 Index has fallen 0.9% in the same time frame.
PerkinElmer, with a market capitalization of $17.7 billion, offers scientific instruments, consumables and services to pharmaceutical, biomedical, environmental testing, chemical and general industrial markets worldwide. Its earnings are anticipated to improve 46.5% over the next five years. The company pulled off a trailing four-quarter earnings surprise of 12.82%, on average.
Image Source: Zacks Investment Research
Key Catalysts
PerkinElmer provides a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way.
In November, PerkinElmer launched ready-to-use Adeno-associated Virus Vectors (AAV) Detection Kits to aid researchers working on gene therapies for various serious diseases. The validated and fully-automatable assays are built on PerkinElmer's proprietary AlphaLISA technology.
The launch will likely expand PerkinElmer's cell and gene therapy portfolio, which includes gene editing and modulation, cell counting, antibody and flow cytometry innovations. This will enable the company to significantly strengthen its Life Sciences business unit in the broader Discovery & Analytical Solutions segment.
PerkinElmer received the FDA’s marketing authorization for the assay kit for in vitro diagnostic (IVD) use by certified laboratories for the simultaneous detection of spinal muscular atrophy (SMA) and severe combined immunodeficiency (SCID) in newborns — EONIS SCID-SMA. PerkinElmer’s Oxford Immunotec announced that the FDA approved the use of the T-Cell Select reagent kit to automate its T-SPOT.TB test workflow for IVD use by certified laboratories in September.
The latest regulatory clearances are likely to aid PerkinElmer in significantly solidifying its foothold in the global IVD space and boosting its Diagnostics business.
The company launched a unique benchtop platform, Cellaca PLX Image Cytometry System, in September. The system is expected to enable researchers to evaluate multiple Critical Quality Attributes of cell samples in a single automated workflow, including cell identity, quality and quantity.
The company’s gross margin has been improving on the back of productivity initiatives and volume leverage. The product introductions are anticipated to enhance the product mix, increasing the gross margin. This, coupled with stringent cost control, will continue to drive the operating margin in the near term.
On the third-quarter 2022 earnings call, the company demonstrated a solid performance despite ongoing macro headwinds like inflationary pressure. Pro-forma adjusted revenues, which include sales from held-for-sale business — Applied, Food and Enterprise Services, were up 9% organically after the exclusion of revenue growth sales from COVID-19 products. Revenues from continuing operations were down 17% year over year and 23% organically.
Factor Hurting the Stock
Growing exposure to the international markets makes the company susceptible to foreign exchange volatility. The unfavorable fluctuations in currency exchange rates can hurt PerkinElmer’s international sales. In the third quarter, foreign exchange created a 6% headwind to revenues.
For the fourth quarter of 2022, the company projects a 7% headwind from foreign exchange and 5% for 2022. Its adjusted gross margin decreased 110 basis points to 64% during the third quarter. The company’s adjusted operating margin was also down 600 basis points to 31.4%.
PerkinElmer, Inc. Price
PerkinElmer, Inc. price | PerkinElmer, Inc. Quote
Estimate Trend
PerkinElmer has been witnessing an upward estimate revision trend for 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved 3.2% south to $5.91.
The Zacks Consensus Estimate for first-quarter 2023 revenues is pegged at $997 million, suggesting a decline of 20.8% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Mesa Laboratories (MLAB - Free Report) and Cardinal Health (CAH - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.96%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 52.7% compared with the industry’s 2.3% increase in the past six months.
Mesa Laboratories, sporting a Zacks Rank #1 at present, has an estimated growth rate of 28.9% for fiscal 2023. MLAB’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 16.56%.
Mesa Laboratories has declined 15.9% against the industry’s 2.2% increase in the past six months.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.2%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average beat being 3.04%.
Cardinal Health has gained 46.8% compared with the industry’s 4.1% increase over the past six months.