On Jun 21, we issued an updated research report on Venlo, Netherlands-based Qiagen N.V. (QGEN - Free Report) – a global provider of innovative technologies and products for pre-analytical sample preparation and molecular diagnostics solutions. The company currently carries a Zacks Rank #4 (Sell).
Qiagen started 2016 on mixed note with first-quarter revenues surpassing the Zacks Consensus Estimate and earnings meeting the same. Moreover, the company’s weak free cash flow reserve raises concern.
Currently, Qiagen records more than 50% of its revenues from international markets which makes the company highly vulnerable to unfavorable foreign exchangetranslation. Evidently, currency headwinds have hurt Qiagen’s first-quarter net sales by 2%. Based on the current exchange rates, management expects an impact of 2% on sales and $0.02 on adjusted EPS in 2016.
The company is also facing increasing competition from firms that provide pre-analytical solutions and other products. Moreover, Qiagen’s personalized healthcare business largely depends on its collaborative relation with pharmaceutical and biotechnology companies. Thus, if the company fails to maintain these ties or if its collaborative partners join hands with the companion diagnostic competitors of Qiagen, it will hurt sales to a large extent.
On a brighter note, Qiagen has been making considerable progress with its QuantiFERON latent TB test, especially with the rollout of the fourth-generation QuantiFERON TB Goal Plus in select markets.Further, the company has expanded its universal NGS portfolio with the launch of over 170 QIAseq Targeted RNA Panels for NGS-based Gene expression and profiling.
Further, to capture a larger share of the billion-dollar molecular diagnostics market, Qiagen has been making considerable progress in its test menu. Last week, the company initiated the simultaneous launch of its QIAsure Methylation test in Europe, Middle East and Africa; which will determine individual patient’s risk of developing cervical cancer.
Key Picks in the Sector
Better-ranked medical stocks are Baxter International Inc. (BAX - Free Report) , Boston Scientific Corporation (BSX - Free Report) and LeMaitre Vascular, Inc. (LMAT - Free Report) . While Baxter sports a Zacks Rank #1 (Strong Buy), Boston Scientific and LeMaitre Vascular carry a Zacks Rank #2 (Buy).
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