A month has gone by since the last earnings report for Qiagen (
QGEN Quick Quote QGEN - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qiagen due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
QIAGEN Q1 Earnings Top Estimates, Operating Margin Down
QIAGEN first-quarter 2023 adjusted earnings per share were 51 cents (52 cents at a constant exchange rate or CER), down 36.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 8.5%.
The adjustment excludes the impact of certain non-recurring items like business integration, acquisition and restructuring-related expenses and purchased intangible amortization expenses, among others.
The GAAP earnings per share for the quarter was 37 cents, down 45% year over year.
Revenues in Detail
Net sales in the first quarter fell 22.8% year over year to $485.4 million (down 20% year over year at CER). The top line missed the Zacks Consensus Estimate by 0.1%. Sales at CER were $502 million, well ahead of the outlook of approximately $490 million.
First-quarter sales were driven by 12% CER growth in the non-COVID-19 portfolio to $434 million. However, sales of COVID-19 products declined 76% at CER to $52 million amid significantly reduced demand compared to the year-ago period.
Geographical Revenue Update
In the quarter under review, sales from the Americas (51% of sales) totaled $247 million, down 2.4% year over year (down 2% at CER).
Revenues from Europe, the Middle East and Africa (32% of sales) fell 37.8% reportedly (down 34% at CER) to $155 million.Further, revenues from Asia-Pacific/Japan (17% of sales) fell 34.1% year over year on a reported basis (down 29% at CER) to $83 million.
As of the first quarter of 2023, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 51.5% of net sales) revenues were down 30% on a reported basis (down 27% at CER) to $250 million.
Life Sciences (48.5% of total revenues) reported revenues of $235 million, down 14% on a reported basis (down 11% at CER).
The adjusted gross profit (excluding the amortization of acquisition-related intangibles) in the quarter under review fell 24.8% to $323.5 million.
Meanwhile, the adjusted gross margin contracted 183 basis points (bps) to 66.6% despite an 18.3% decline in the cost of sales (excluding amortization) to $162 million.
Sales and marketing expenses of QIAGEN fell 3.3% year over year to $115 million. Research and development expenses rose 18% year over year to $54.7 million, whereas G&A expenses fell 4.1% year over year to $33 million.
The adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration and others) declined 47.5% year over year to $121.2 million in the first quarter. Meanwhile, the adjusted operating margin contracted 1180 bps to 25%.
QIAGEN exited the first quarter of 2023 with cash and cash equivalents and short-term investments of $1.29 billion, down from $1.42 billion at the end of 2022. The long-term debt was $1.49 billion at the end of the first quarter of 2023 compared with $1.47 at the end of 2022.
The cumulative net cash inflow from operating activities at the end of the first quarter was $71.9 million compared with $207.4 million in the year-ago period.
In January 2023, QIAGEN completed the acquisition of privately held biotech company, Verogen, in a $150 million cash transaction. The buyout strengthens QIAGEN’s leadership in the fast-growing field of Human ID/forensics, anchored by sample collection and preparation, genetic testing analysis and workflow automation.
QIAGEN reaffirmed its outlook for 2023, which it originally announced during the 2022 fourth-quarter earnings call.
Full-year net sales are expected to be nearly $2.05 billion at CER (unchanged from the previous outlook). The Zacks Consensus Estimate for 2023 revenues is pegged at $2.05 billion.
The adjusted EPS for 2023 is expected at about $2.10 at CER (unchanged). The Zacks Consensus Estimate for adjusted EPS is pegged at $2.10.
For the second quarter of 2023, the company expects net sales of at least $490 million at CER. The Zacks Consensus Estimate for the same is pegged at $499.9 million.
The adjusted EPS is expected to be at least 50 cents at CER. The Zacks Consensus Estimate for the adjusted EPS is also pegged at 50 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
Currently, Qiagen has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Qiagen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Qiagen is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Repligen (
RGEN Quick Quote RGEN - Free Report) , a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended March 2023 more than a month ago.
Repligen reported revenues of $182.66 million in the last reported quarter, representing a year-over-year change of -11.5%. EPS of $0.64 for the same period compares with $0.92 a year ago.
For the current quarter, Repligen is expected to post earnings of $0.50 per share, indicating a change of -45.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -13.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Repligen. Also, the stock has a VGM Score of D.