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3 Reasons to Retain QuidelOrtho (QDEL) Stock in Your Portfolio
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QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by a solid fourth-quarter 2022 performance, along with a few regulatory clearances, is expected to contribute further. However, headwinds due to data security threats and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 22.2% compared with a 39.7% decline of the industry and the S&P 500's 13.9% fall.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.72 billion. QuidelOrtho projects 11.4% growth for 2024 and expects to maintain its strong performance. The company’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 54.3%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which it sells directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter use. Currently, QuidelOrtho’s diagnostic testing solutions include the Sofia and Sofia 2 Analyzers, QuickVue, and InflammaDry and AdenoPlus products. Some other notable products include the Solana system, and the Savanna multiplex molecular analyzer system and Savanna RVP4 assay.
Regulatory Approvals: We are upbeat about a few recent regulatory clearances for QuidelOrtho’s products. This month, the company announced that it had been granted a De Novo request from the FDA, allowing the company to market its new Sofia 2 SARS Antigen+ FIA (fluorescent immunoassay).
In December 2022, QuidelOrtho announced that its TriageTrue High-Sensitivity Troponin I Test on the Quidel Triage MeterPro had been approved for use in Canada by Health Canada.
Strong Q4 Results: QuidelOrtho’s robust fourth-quarter 2022 results buoy optimism. The company recorded robust overall top-line performance and strong revenues in the majority of its business units at a constant exchange rate, excluding COVID-19 revenues. Excluding COVID-19 revenues, geographical results also improved in two regions. Strong Recurring revenues, which were up including and excluding COVID-19 revenues, and solid Instrument revenues were also seen. QuidelOrtho’s expanded global commercial footprint also raises optimism.
Downsides
Data Security Threats: QuidelOrtho utilizes complex information technology systems to transmit and store information, including proprietary information, to support its business and process. In the future, these systems may prove inadequate to its business needs and necessary upgrades may not operate as designed, resulting in high costs or disruptions in portions of the company’s business.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests and these are expected to remain a significant portion of the company’s total revenues for 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 will be affected.
Estimate Trend
QuidelOrtho is witnessing a positive estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.9% north to $5.20.
The Zacks Consensus Estimate for the company’s first-quarter 2023 revenues is pegged at $762.7 million, suggesting a 23.9% decline from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 4.6% against the industry’s 15.6% decline in the past year.
Henry Schein, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 10.7% compared with the industry’s 9.8% decline over the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 12.8% compared with the industry’s 15.6% decline over the past year.
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3 Reasons to Retain QuidelOrtho (QDEL) Stock in Your Portfolio
QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by a solid fourth-quarter 2022 performance, along with a few regulatory clearances, is expected to contribute further. However, headwinds due to data security threats and overdependence on diagnostic tests persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 22.2% compared with a 39.7% decline of the industry and the S&P 500's 13.9% fall.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.72 billion. QuidelOrtho projects 11.4% growth for 2024 and expects to maintain its strong performance. The company’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 54.3%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which it sells directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter use. Currently, QuidelOrtho’s diagnostic testing solutions include the Sofia and Sofia 2 Analyzers, QuickVue, and InflammaDry and AdenoPlus products. Some other notable products include the Solana system, and the Savanna multiplex molecular analyzer system and Savanna RVP4 assay.
Regulatory Approvals: We are upbeat about a few recent regulatory clearances for QuidelOrtho’s products. This month, the company announced that it had been granted a De Novo request from the FDA, allowing the company to market its new Sofia 2 SARS Antigen+ FIA (fluorescent immunoassay).
In December 2022, QuidelOrtho announced that its TriageTrue High-Sensitivity Troponin I Test on the Quidel Triage MeterPro had been approved for use in Canada by Health Canada.
Strong Q4 Results: QuidelOrtho’s robust fourth-quarter 2022 results buoy optimism. The company recorded robust overall top-line performance and strong revenues in the majority of its business units at a constant exchange rate, excluding COVID-19 revenues. Excluding COVID-19 revenues, geographical results also improved in two regions. Strong Recurring revenues, which were up including and excluding COVID-19 revenues, and solid Instrument revenues were also seen. QuidelOrtho’s expanded global commercial footprint also raises optimism.
Downsides
Data Security Threats: QuidelOrtho utilizes complex information technology systems to transmit and store information, including proprietary information, to support its business and process. In the future, these systems may prove inadequate to its business needs and necessary upgrades may not operate as designed, resulting in high costs or disruptions in portions of the company’s business.
Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests and these are expected to remain a significant portion of the company’s total revenues for 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 will be affected.
Estimate Trend
QuidelOrtho is witnessing a positive estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.9% north to $5.20.
The Zacks Consensus Estimate for the company’s first-quarter 2023 revenues is pegged at $762.7 million, suggesting a 23.9% decline from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 4.6% against the industry’s 15.6% decline in the past year.
Henry Schein, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 10.7% compared with the industry’s 9.8% decline over the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 12.8% compared with the industry’s 15.6% decline over the past year.