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On Mar 9, we issued an updated research report on Radnor, PA-based VWR Corporation – a global provider of products, services and solutions to laboratory and production facilities.
VWR recently posted mixed fourth-quarter 2016 results with earnings beating the Zacks Consensus Estimate and revenues missing the mark. The company also witnessed a low single-digit decline in biopharma and relatively weaker performance in equipment and instrumentation during the reported quarter. A dull 2017 outlook is another dampening factor.
Even though the company’s gross margin in the reported quarter has improved, persistent decline in the company’s operating margin continues to raise concern. Escalating cost of production has been a primary factor behind the lackluster outcome. Moreover, as VWR offers products from a wide range of suppliers, the company’s ability to sustain its gross margins has been and will continue to be partly dependent on its ability to obtain favorable terms from its suppliers. Management fears that if these terms change from time to time, such changes could affect its gross margin.
Over the past few quarters, the continuous strengthening of the dollar versus the British pound, the euro and other currencies has severely hit VWR’s international business. Notably, of the company’s total net sales for 2016, approximately one-half were foreign-denominated. At current exchange rate, currency headwind is expected to be about 1.8% of reported revenues for 2017.
Meanwhile, the presence of a large number of players has made the medical devices market intensely competitive. In the Americas segment within the laboratory products business, VWR competes mainly with Thermo Fisher Scientific. Within the value-added services business, the company competes with companies which offer laboratory management services such as Thermo Fisher Scientific, PerkinElmer, Agilent Technologies and other service outsourcing companies. In the EMEA-APAC segment within the laboratory products business, VWR principally competes with Thermo Fisher Scientific for certain global customers and with certain regional competitors.
On a positive note, the company’s Americas sales are solid. The company also recorded strong EMEA-APAC sales with the improved foreign exchange scenario. In the last one month, VWR has traded above the Zacks categorized Medical - Dental Supplies industry. The stock has gained 4.7%, higher than the 2.5% gain of the industry. However, the above-mentioned downsides overshadow the limited merits of the stock, causing concern for investors.
Zacks Rank & Key Picks
VWR currently bears a Zacks Rank #4 (Sell). Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Neogen Corp. (NEOG - Free Report) . Inogen sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained over 100% in the last one year in comparison to the S&P 500’s gain of 16.9%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 74.6% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Neogen gained 22.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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VWR Corporation (VWR): Q4 Lacks Shine, Currency Woes Remain
On Mar 9, we issued an updated research report on Radnor, PA-based VWR Corporation – a global provider of products, services and solutions to laboratory and production facilities.
VWR recently posted mixed fourth-quarter 2016 results with earnings beating the Zacks Consensus Estimate and revenues missing the mark. The company also witnessed a low single-digit decline in biopharma and relatively weaker performance in equipment and instrumentation during the reported quarter. A dull 2017 outlook is another dampening factor.
Even though the company’s gross margin in the reported quarter has improved, persistent decline in the company’s operating margin continues to raise concern. Escalating cost of production has been a primary factor behind the lackluster outcome. Moreover, as VWR offers products from a wide range of suppliers, the company’s ability to sustain its gross margins has been and will continue to be partly dependent on its ability to obtain favorable terms from its suppliers. Management fears that if these terms change from time to time, such changes could affect its gross margin.
Over the past few quarters, the continuous strengthening of the dollar versus the British pound, the euro and other currencies has severely hit VWR’s international business. Notably, of the company’s total net sales for 2016, approximately one-half were foreign-denominated. At current exchange rate, currency headwind is expected to be about 1.8% of reported revenues for 2017.
Meanwhile, the presence of a large number of players has made the medical devices market intensely competitive. In the Americas segment within the laboratory products business, VWR competes mainly with Thermo Fisher Scientific. Within the value-added services business, the company competes with companies which offer laboratory management services such as Thermo Fisher Scientific, PerkinElmer, Agilent Technologies and other service outsourcing companies. In the EMEA-APAC segment within the laboratory products business, VWR principally competes with Thermo Fisher Scientific for certain global customers and with certain regional competitors.
On a positive note, the company’s Americas sales are solid. The company also recorded strong EMEA-APAC sales with the improved foreign exchange scenario. In the last one month, VWR has traded above the Zacks categorized Medical - Dental Supplies industry. The stock has gained 4.7%, higher than the 2.5% gain of the industry. However, the above-mentioned downsides overshadow the limited merits of the stock, causing concern for investors.
Zacks Rank & Key Picks
VWR currently bears a Zacks Rank #4 (Sell). Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Neogen Corp. (NEOG - Free Report) . Inogen sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained over 100% in the last one year in comparison to the S&P 500’s gain of 16.9%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 74.6% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Neogen gained 22.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>