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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 product innovation aiding growth. The optimism led by a solid first-quarter 2023 performance and its strong diagnostic business are 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 14.3% compared with a 23.5% decline of the industry. The S&P 500 has witnessed 11.9% growth in the said time frame.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.70 billion. QuidelOrtho projects 7.9% 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 once, the average surprise being 55%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Diagnostic Business Grows Well: We are upbeat about QuidelOrtho’s focus on advancing its diagnostics business to improve human health, which has enabled the company to target market segments that represent significant total market opportunities. On the first-quarter 2023 earnings call in May, QuidelOrtho’s management confirmed that the company remains focused on its three near-term growth drivers — the VITROS System in the Labs business, the Sofia platform within the Point-of-Care business and the Savanna Molecular platform in the Molecular Diagnostics business.
Product Innovation Aids Growth: We are optimistic about QuidelOrtho’s progress with its products over the past few months. On the first-quarter 2023 earnings call, QuidelOrtho’s management confirmed that the company has 20-25 new and refreshed assays planned for launch by the end of 2024.
Over the past few months, QuidelOrtho has been making progress on the regulatory front for its products. On the earnings call, management stated that QuidelOrtho’s Savanna Molecular platform is currently available throughout Europe. The company has plans to commercialize it worldwide upon receiving additional regulatory clearances.
Strong Q1 Results: QuidelOrtho’s robust first-quarter 2023 results buoy optimism. The company recorded robust revenues from its Labs segment and China region. The company also registered solid revenues from its Instrument revenue category. QuidelOrtho also saw an uptick in its Vitros System’s integrated installed base and Sofia Platform’s cumulative installed base in the quarter.
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 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 1.3% north to $5.26.
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $618.2 million, suggesting a 0.8% improvement 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) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 14.7% compared with the industry’s 9.5% rise in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has gained 57.1% compared with the industry’s 16.7% rise over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 43.6% against the industry’s 23.5% decline over the past year.
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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 product innovation aiding growth. The optimism led by a solid first-quarter 2023 performance and its strong diagnostic business are 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 14.3% compared with a 23.5% decline of the industry. The S&P 500 has witnessed 11.9% growth in the said time frame.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.70 billion. QuidelOrtho projects 7.9% 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 once, the average surprise being 55%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Diagnostic Business Grows Well: We are upbeat about QuidelOrtho’s focus on advancing its diagnostics business to improve human health, which has enabled the company to target market segments that represent significant total market opportunities. On the first-quarter 2023 earnings call in May, QuidelOrtho’s management confirmed that the company remains focused on its three near-term growth drivers — the VITROS System in the Labs business, the Sofia platform within the Point-of-Care business and the Savanna Molecular platform in the Molecular Diagnostics business.
Product Innovation Aids Growth: We are optimistic about QuidelOrtho’s progress with its products over the past few months. On the first-quarter 2023 earnings call, QuidelOrtho’s management confirmed that the company has 20-25 new and refreshed assays planned for launch by the end of 2024.
Over the past few months, QuidelOrtho has been making progress on the regulatory front for its products. On the earnings call, management stated that QuidelOrtho’s Savanna Molecular platform is currently available throughout Europe. The company has plans to commercialize it worldwide upon receiving additional regulatory clearances.
Strong Q1 Results: QuidelOrtho’s robust first-quarter 2023 results buoy optimism. The company recorded robust revenues from its Labs segment and China region. The company also registered solid revenues from its Instrument revenue category. QuidelOrtho also saw an uptick in its Vitros System’s integrated installed base and Sofia Platform’s cumulative installed base in the quarter.
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 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 1.3% north to $5.26.
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $618.2 million, suggesting a 0.8% improvement 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) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 14.7% compared with the industry’s 9.5% rise in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has gained 57.1% compared with the industry’s 16.7% rise over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 43.6% against the industry’s 23.5% decline over the past year.