QIAGEN N.V. (QGEN Quick QuoteQGEN - Free Report) is likely to grow in the coming quarters, backed by its strong potential in the next-generation sequencing (NGS) platform. QIAGEN’s long-term business strategy involves forming partnerships with academic, corporate and other partners for product development, which is very promising. A strong solvency position also buoys optimism.

Meanwhile, concerns loom over the impact of macroeconomic challenges on QIAGEN’s operations. Competitive disadvantages may also hurt its performance.

In the past year, this Zacks Rank #3 (Hold) stock has declined 1.2% compared with a 9.4% decrease of the industry. The S&P 500 composite has witnessed a 26.2% rise in the said time frame.

The renowned global provider of sample and assay technologies has a market capitalization of $10.36 billion. QIAGEN has an earnings yield of 4.60% compared with the industry’s -25.17%. QGEN’s earnings surpassed estimates in three of the trailing four quarters, delivering an average surprise of 1.7%.

Let’s delve deeper.

Upsides

Solid NGS Platform Prospects: QIAGEN’s NGS portfolio has witnessed strong double-digit revenue growth over the past few quarters. The addition of NGS leaders like Verogen has enhanced its leadership in the fast-growing field of Human ID /forensics based on sample collection and preparation, genetic testing analysis and workflow automation. Moreover, QIAGEN’s partnership with Element Biosciences to offer NGS workflow on their AVITI System aligns with its strategy to provide platform-agnostic next-generation sequencing consumable and bioinformatics solutions.

In the first quarter of 2024, the Genomics/NGS group reported higher sales of universal library prep kits for use with third-party next-generation sequencers. The QDI business continued to see solid demand trends, setting out an optimistic CER growth outlook for the full year. Furthermore, QIAGEN continuously integrates AI technology into the QDI portfolio, launching an AI-driven knowledge base for drug discovery and enhancing QCI Interpret software for rare disease gene coverage.

Strategic Collaborations to Drive Growth: In the first quarter, the company teamed up with Penn State University to help shape research, education and outreach in microbiomes. QIAGEN’s comprehensive microbiome portfolio includes tools for every aspect of the scientific workflow, along with robust bioinformatics tools for digital analysis.

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With the IPPA partnership, QIAGEN reinforces its commitment to TB screening. Its collaboration with Element Biosciences promises to deliver unprecedented insights across various genomic applications to our customers worldwide. Last year, QIAGEN and Myriad Genetics announced a master collaboration agreement to offer NGS and digital PCR solutions to pharma companies for the development of cancer tests.

Favorable Solvency: QIAGEN demonstrated strong financial stability, exiting the first quarter of 2024 with cash and cash equivalents and short-term investments of $893.1 million and a current debt of $591 million. The long-term debt (net of the current portion) was $912.8 million compared to $921.8 million at 2023-end.

Downsides

Macro Headwinds Hamper Global Sales: QIAGEN’s wide international presence is subject to a variety of risks arising from the economy, political outlook, language and cultural barriers in the countries it operates. In many of these emerging markets, QIAGEN faces several risks, such as weak legal systems, unstable governments, privatization or other government actions affecting the flow of goods and currency.

The company’s net sales declined 5% in the first quarter compared to the first quarter of 2023 due to challenging macro demand trends. Sales in China also declined at a double-digit CER rate.

Competitive Headwinds: QIAGEN faces increasing competition from firms that provide competitive pre-analytical solutions and other products used by QIAGEN’s customers. Competitors may have significant advantages in terms of financial, operational, sales and marketing resources and experience in research and development, making it difficult to convert customers who have already purchased products from them.

Estimate Trend

In the past 30 days, the Zacks Consensus Estimate for QIAGEN’s 2024 earnings per share has remained constant at $2.09.

The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $1.99 billion. This suggests an increase of 1.5% from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are High Tide (HITI Quick QuoteHITI - Free Report) , Hims & Hers Health (HIMS Quick QuoteHIMS - Free Report) and Medpace (MEDP Quick QuoteMEDP - Free Report) .

High Tide’s earnings are expected to surge 100% in 2024 compared with the industry’s 17.7%. HITI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 91.7%. Its shares have surged 81.1% against the industry’s 2.9% fall in the past year.

HITI sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hims & Hers Health, sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared to the industry’s 17.7%. Shares of the company have increased 31.2% against the industry’s 24% fall over the past year.

HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. In the last reported quarter, it delivered an average earnings surprise of 150%.

Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared to the industry’s 13.4%. Shares of MEDP have rallied 92.6% compared with the industry’s 5.5% rise over the past year.

MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an average earnings surprise of 30.6%.