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Thermo Fisher's (TMO) Strong End Markets and New Buyouts Aid
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Thermo Fisher Scientific (TMO - Free Report) continues to gain from strategic buyouts and partnerships. Thermo Fisher currently carries a Zacks Rank #2 (Buy).
Thermo Fisher’s business strategy primarily includes expansion through strategic acquisition of technologies and businesses that complement or augment the company’s existing products and services. As a result of these acquisitions, till the end of fiscal 2022, the company recorded significant goodwill and indefinite-lived intangible assets on its balance sheet, amounting to approximately $41.20 billion and $1.24 billion, respectively.
Its recent strategic acquisitions too are likely to drive future growth. In August 2023, Thermo Fisher acquired CorEvitas for $912.5 million in cash. The recent buyout advances world-class clinical research capabilities with leading regulatory-grade registries platform.
In June 2023, Thermo Fisher acquired MarqMetrix. The acquisition of MarqMetrix is an excellent strategic fit for Thermo Fisher and adds highly complementary Raman-based in-line PAT to Thermo Fisher’s portfolio.
Image Source: Zacks Investment Research
In terms of end market, of late, Thermo Fisher’s biosciences and bioproduction businesses have expanded their capacity to meet the needs of pharma and biotech customers, enabling them to fulfill global vaccine manufacturing requirements. Additionally, the pharma services business has been providing pharma and biotech customers with the services they need to develop and produce vaccines and therapies globally. In terms of the latest developments, in the second quarter, the company registered the strongest growth in the pharma and biotech end market.
In the academic and government end market, Thermo Fisher grew in high single digits in the reported quarter. The company registered robust growth in the electron microscopy and chromatography and mass spectrometry businesses, as well as the research and safety market channel. Within industrial and applied business, the company grew in low single digits. The strongest growth in the end market was in analytical instruments businesses.
On the flip side, since the past few quarters, Thermo Fisher has been experiencing a continuous decline in COVID testing-related demand. Demand is expected to be much lower in 2023 as customer testing as well as therapy and vaccine demand declines.
Further, the challenging macroeconomic scenario and slower economic recovery in China are hurting Thermo Fisher's growth. The company has been witnessing headwinds in the government and academic markets. Moreover, many countries in Europe are also going through a tough time that might impact their academic budgets. We remain cautious since growth could further moderate if the economic scenario worsens.
Over the past year, shares of Thermo Fisher have declined 2.9% against the industry’s 1.9% rise.
Other Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quanterix (QTRX - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has gained 25.5% against the industry’s 8.9% decline over the past year.
Estimates for Quanterix’s 2023 loss per share have remained constant at 97 cents in the past 30 days. Shares of the company have surged 141.5% in the past year compared with the industry’s fall of 5.6%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.
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Thermo Fisher's (TMO) Strong End Markets and New Buyouts Aid
Thermo Fisher Scientific (TMO - Free Report) continues to gain from strategic buyouts and partnerships. Thermo Fisher currently carries a Zacks Rank #2 (Buy).
Thermo Fisher’s business strategy primarily includes expansion through strategic acquisition of technologies and businesses that complement or augment the company’s existing products and services. As a result of these acquisitions, till the end of fiscal 2022, the company recorded significant goodwill and indefinite-lived intangible assets on its balance sheet, amounting to approximately $41.20 billion and $1.24 billion, respectively.
Its recent strategic acquisitions too are likely to drive future growth. In August 2023, Thermo Fisher acquired CorEvitas for $912.5 million in cash. The recent buyout advances world-class clinical research capabilities with leading regulatory-grade registries platform.
In June 2023, Thermo Fisher acquired MarqMetrix. The acquisition of MarqMetrix is an excellent strategic fit for Thermo Fisher and adds highly complementary Raman-based in-line PAT to Thermo Fisher’s portfolio.
Image Source: Zacks Investment Research
In terms of end market, of late, Thermo Fisher’s biosciences and bioproduction businesses have expanded their capacity to meet the needs of pharma and biotech customers, enabling them to fulfill global vaccine manufacturing requirements. Additionally, the pharma services business has been providing pharma and biotech customers with the services they need to develop and produce vaccines and therapies globally. In terms of the latest developments, in the second quarter, the company registered the strongest growth in the pharma and biotech end market.
In the academic and government end market, Thermo Fisher grew in high single digits in the reported quarter. The company registered robust growth in the electron microscopy and chromatography and mass spectrometry businesses, as well as the research and safety market channel. Within industrial and applied business, the company grew in low single digits. The strongest growth in the end market was in analytical instruments businesses.
On the flip side, since the past few quarters, Thermo Fisher has been experiencing a continuous decline in COVID testing-related demand. Demand is expected to be much lower in 2023 as customer testing as well as therapy and vaccine demand declines.
Further, the challenging macroeconomic scenario and slower economic recovery in China are hurting Thermo Fisher's growth. The company has been witnessing headwinds in the government and academic markets. Moreover, many countries in Europe are also going through a tough time that might impact their academic budgets. We remain cautious since growth could further moderate if the economic scenario worsens.
Over the past year, shares of Thermo Fisher have declined 2.9% against the industry’s 1.9% rise.
Other Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quanterix (QTRX - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has an estimated long-term growth rate of 12.7%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, with an average surprise of 21.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has gained 25.5% against the industry’s 8.9% decline over the past year.
Estimates for Quanterix’s 2023 loss per share have remained constant at 97 cents in the past 30 days. Shares of the company have surged 141.5% in the past year compared with the industry’s fall of 5.6%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.