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Fluidigm: Q4 Preliminary Results Fail to Cheer Investors

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The market is not really happy with South San Francisco, CA-based Fluidigm Corporation’s preliminary results for the fourth quarter and full-year 2016. Following the announcement, the company’s stock price moved down a modest 0.7% in the last trading session to close at $7.94.  

We believe that the discouraging revenue estimates are the reason behind the investors' lack of confidence. Fluidigm estimates revenues in the range of $24.7–$25.2 million for the fourth quarter. The midpoint of the given range reflects a year-over-year decline of 19%. Revenue for full-year 2016 is expected between $104.1 million and $104.6 million. The midpoint of the range reflects a year-over-year decline of 9%.

However, over the last three months the company posted a stellar return of almost 70.6%, way better than the Zacks categorized Medical Instruments sub-industry’s decline of roughly 5.9%. Fluidigm also recorded a three-year CAGR of 30.3% for revenues.

Getting back to the news, as of Dec 31, 2016, Fluidigm had cash and cash equivalents worth approximately $59.6 million. The company expects to release its full results in early February.

Major Highlights

Of the major developments in the fourth quarter, the initiation of commercial delivery of Imaging Mass Cytometry systems and the launch of the Maxpar mass cytometry panels for immuno-oncology are notable.

Additionally, the company unveiled a new high-throughput integrated fluidic circuit (HT IFC) to separate single cells during mRNA sequencing analysis. Notably, HT IFC leverages on the company’s flagship Fluidigm C1 system, a leading automated solution for single-cell genomics (read more: Fluidigm Unveils High-Throughput Integrated Fluidic Circuit).

Fluidigm had also entered into a distribution agreement with GenomOncology to market the GO Clinical Workbench using Fluidigm systems.

Our Take

Fluidigm’s preliminary results fail to instill hope, given its year-over-year revenue decline. However, the company’s strategic initiatives, portfolio and pipeline strength continue to impress.

Additionally, a long-term expected earnings growth of 25% raises optimism. We believe escalating interest in the single cell analysis field will benefit Fluidigm over the long haul.

Furthermore, Fluidim registered a solid average earnings surprise of 13.9% over the past four trailing quarters which is a strong positive in our view.

Zacks Rank and Stocks to Consider

This leading player in the analysis of single cells and industrial application of genomics carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector include Glaukos Corporation (GKOS - Free Report) , Dextera Surgical Inc. and Penumbra Inc. (PEN - Free Report) . Notably, Glaukos Corporation and Penumbra sport a Zacks Rank #1 (Strong Buy) while Dextera carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Glaukos has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 109.14%.

Dextera Surgical posted a positive earnings surprise of 8.3% in the last reported quarter. Additionally, a long-term expected earnings growth rate of 25% raises investor confidence.

Penumbra has a long-term expected earnings growth rate of 20%. Notably, the stock represents a stellar one-year return of almost 32.9%.

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