It has been about a month since the last earnings report for Qiagen (QGEN Quick QuoteQGEN - Free Report) . Shares have lost about 0.3% 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 Q2 Earnings Surpass Estimates, Margins Crash

QIAGEN N.V.’s second-quarter 2024 adjusted earnings per share (EPS) were 55 cents, the same at the constant exchange rate (CER). The reported figure increased 7.8% from the 2023 comparable figure and topped the Zacks Consensus Estimate by 5.8%.

The adjustment excludes the impact of certain non-recurring items like business integration, acquisition and restructuring-related expenses, purchased intangible amortization expenses and non-cash interest expense charges, among others.

On a GAAP basis, the loss in the second quarter was 83 cents per share compared to the EPS of 35 cents in the year-ago period.

Revenues in Detail

Quarterly net sales were up 0.3% year over year to $496.3 million (up 1% at CER). The top line beat the Zacks Consensus Estimate by 0.5%. Sales at CER were $502 million, ahead of the outlook of at least $495 million.

Geographical Revenue Analysis

Sales from the Americas (52.7% of sales) totaled $262 million compared with $263 million in the prior-year period. Our model projected $256.6 million for this region in the second quarter.

Revenues from Europe, the Middle East and Africa (32%) were up 5% on a reported basis and 7% at CER to $159 million. Our model’s projection was $158.3 million.

Revenues from Asia-Pacific/Japan (15.3%) fell 7% year over year on a reported basis (down 3% at CER) to $76 million. Our model forecast was $79 million.

Segmental Details

As of the second quarter 2024, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.

Molecular Diagnostics (representing 53.6% of net sales) revenues were up 3% on a reported basis (up 4% at CER) to $266 million. Our model projected $262 million for this segment.

Life Sciences (46.4%) reported revenues of $230 million, down 2% on a reported basis and 1% at CER). This compares to our model forecast of $231.9 million.

Operational Update

In the second quarter, the company’s cost of sales (excluding the amortization of acquisition-related intangibles) surged 167.9%. The adjusted gross profit fell 0.5% year over year to $316.1 million. Meanwhile, the adjusted gross margin contracted 462 basis points (bps) to 63.7%.

Sales and marketing expenses fell 1.4% year over year to $114.7 million. R&D expenses of $49.1 million were down 1.6% year over year.  G&A expenses declined 2% year over year to $29 million.

Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring, integration and others) increased 1.3% year over year to $124 million. Meanwhile, the adjusted operating margin contracted 135 bps to 24.9%.

Financial Update

QIAGEN exited the second quarter of 2024 with cash, cash equivalents and short-term investments of $890.2 million compared with $893.1 million at the end of the first quarter.

The cumulative net cash provided by operating activities at the end of the second quarter of 2024 was $299.7 million compared with $183.4 million in the year-ago period.

Guidance

QIAGEN provided an updated financial outlook for 2024.

Full-year net sales are expected to be at least $1.98 billion CER (previously at least $2.0 billion CER). Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for revenues is pegged at $1.98 billion.

The adjusted EPS is expected to be at least $2.16 at CER (earlier $2.14 CER). The Zacks Consensus Estimate is pegged at $2.12.

The company also provided a third-quarter 2024 outlook. QGEN estimates net sales of at least $495 million at CER compared with $476 million in the third quarter of 2023. The Zacks Consensus Estimate is pegged at $498.7 million.

The adjusted EPS is expected to be at least 55 cents at CER compared to 50 cents in the third quarter of 2023. The Zacks Consensus Estimate is pegged at 54 cents.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Qiagen has an average Growth Score of C, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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 belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alkermes (ALKS Quick QuoteALKS - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Alkermes reported revenues of $399.13 million in the last reported quarter, representing a year-over-year change of -35.4%. EPS of $0.72 for the same period compares with $0.55 a year ago.

Alkermes is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year change of +26.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.8%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Alkermes. Also, the stock has a VGM Score of A.