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Here's Why Investors Should Buy Bio-Rad (BIO) Stock Now
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Bio-Rad Laboratories, Inc. (BIO - Free Report) is gaining from robust growth in Life Science and Clinical Diagnostics arms. Solid prospects in the blood typing market and the company’s focus on the international market look encouraging.
In the past six months, shares of this Zacks Rank #1 (Strong Buy) company have gained 22.4% compared with the 10.2% rise of the industry and a 14.5% rise of the S&P 500 composite.
The renowned manufacturer and global supplier of clinical diagnostics and life science research products has a market capitalization of $13.89 billion.
In the past five years, the company registered earnings growth of 25.3%, way ahead of the industry’s 9.6%. The company’s earnings have surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 27.54%.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors.
Factors At Play
Focus on International Markets: Bio-Rad has been deriving more than 60% of its net sales from international markets. The company experienced double-digit currency neutral year-over-year core revenue growth in the Americas and Asia, while Europe posted a more modest increase, primarily reflecting ongoing supply chain constraints for diagnostic products. On a geographic basis, the Diagnostics group’s year-over-year currency-neutral core revenues rose in the Americas. Within Cinical Diagnostics, currency neutral full-year core revenues grew in the Americas and Europe.
Segmental Growth: Despite supply chain constraints, the underlying Life Science year-over-year currency-neutral core revenue growth was 28.1%. The year-over-year growth was primarily driven by Droplet Digital PCR, process chromatography and Western blotting. The company also witnessed good growth for the qPCR products, in part driven by the uptake of the new CFX Opus platform. The company continued to experience strong initial customer interest and demand for the recently introduced QX600 ddPCR system. Bio-Rad also expects a more meaningful revenue contribution from this platform in 2023.
Clinical Diagnostics Continue to Gain Momentum: During fourth-quarter 2022, on a geographic basis, the Diagnostics group’s year-over-year currency neutral core revenue grew in the Americas and declined in Europe and in Asia. Sales of Clinical Diagnostics products for 2022 were up 0.4% on a currency neutral basis. Excluding COVID-related sales, Clinical Diagnostic year-over-year currency neutral core revenue growth was 1.3%, which was impacted by supply chain constraints.
Image Source: Zacks Investment Research
Strong Solvency and Balance Sheet: Bio-Rad exited 2022 with cash and cash equivalents (including short-term investments) of 1.79 billion compared with $875.5 million at the end of 2021. Total debt (including current maturities) at the end of 2022 was $1.19 billion compared with $11 million at the end of 2021.This figure is much lower than the quarter-end cash and cash equivalent and investments level, indicating strong solvency. This is good news in terms of the solvency position of the company, at least during the economic downturn, implying that the company is holding sufficient cash for debt repayment.
Estimate Trends
The Zacks Consensus Estimate for Bio-Rad’s 2023 earnings is pegged at $15.91, suggesting a 10.3% rise from the year-ago reported number.
The Zacks Consensus Estimate for the company’s 2023 revenues is pinned at $2.95 billion, indicating a 5.2% rise from the year-ago reported number.
Key Picks
Some other top-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%.
Hologic has inched up 8.6% against the industry’s 13.8% fall in the past year.
Henry Schein, carrying a Zacks Rank #1 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 7.9% compared with the industry’s 4% decline in 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 4.3% compared with the industry’s 13.9% decline in the past year.
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Here's Why Investors Should Buy Bio-Rad (BIO) Stock Now
Bio-Rad Laboratories, Inc. (BIO - Free Report) is gaining from robust growth in Life Science and Clinical Diagnostics arms. Solid prospects in the blood typing market and the company’s focus on the international market look encouraging.
In the past six months, shares of this Zacks Rank #1 (Strong Buy) company have gained 22.4% compared with the 10.2% rise of the industry and a 14.5% rise of the S&P 500 composite.
The renowned manufacturer and global supplier of clinical diagnostics and life science research products has a market capitalization of $13.89 billion.
In the past five years, the company registered earnings growth of 25.3%, way ahead of the industry’s 9.6%. The company’s earnings have surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 27.54%.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors.
Factors At Play
Focus on International Markets: Bio-Rad has been deriving more than 60% of its net sales from international markets. The company experienced double-digit currency neutral year-over-year core revenue growth in the Americas and Asia, while Europe posted a more modest increase, primarily reflecting ongoing supply chain constraints for diagnostic products. On a geographic basis, the Diagnostics group’s year-over-year currency-neutral core revenues rose in the Americas. Within Cinical Diagnostics, currency neutral full-year core revenues grew in the Americas and Europe.
Segmental Growth: Despite supply chain constraints, the underlying Life Science year-over-year currency-neutral core revenue growth was 28.1%. The year-over-year growth was primarily driven by Droplet Digital PCR, process chromatography and Western blotting. The company also witnessed good growth for the qPCR products, in part driven by the uptake of the new CFX Opus platform. The company continued to experience strong initial customer interest and demand for the recently introduced QX600 ddPCR system. Bio-Rad also expects a more meaningful revenue contribution from this platform in 2023.
Clinical Diagnostics Continue to Gain Momentum: During fourth-quarter 2022, on a geographic basis, the Diagnostics group’s year-over-year currency neutral core revenue grew in the Americas and declined in Europe and in Asia. Sales of Clinical Diagnostics products for 2022 were up 0.4% on a currency neutral basis. Excluding COVID-related sales, Clinical Diagnostic year-over-year currency neutral core revenue growth was 1.3%, which was impacted by supply chain constraints.
Image Source: Zacks Investment Research
Strong Solvency and Balance Sheet: Bio-Rad exited 2022 with cash and cash equivalents (including short-term investments) of 1.79 billion compared with $875.5 million at the end of 2021. Total debt (including current maturities) at the end of 2022 was $1.19 billion compared with $11 million at the end of 2021.This figure is much lower than the quarter-end cash and cash equivalent and investments level, indicating strong solvency. This is good news in terms of the solvency position of the company, at least during the economic downturn, implying that the company is holding sufficient cash for debt repayment.
Estimate Trends
The Zacks Consensus Estimate for Bio-Rad’s 2023 earnings is pegged at $15.91, suggesting a 10.3% rise from the year-ago reported number.
The Zacks Consensus Estimate for the company’s 2023 revenues is pinned at $2.95 billion, indicating a 5.2% rise from the year-ago reported number.
Key Picks
Some other top-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 stocks here.
Hologic has inched up 8.6% against the industry’s 13.8% fall in the past year.
Henry Schein, carrying a Zacks Rank #1 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 7.9% compared with the industry’s 4% decline in 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 4.3% compared with the industry’s 13.9% decline in the past year.