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Reasons to Retain QuidelOrtho Stock in Your Portfolio for Now
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Key Takeaways
QuidelOrtho is poised for growth on its strong product portfolio and cost-saving progress.
QDEL's Labs business leads first-quarter revenues, with Immunohematology and Point of Care adding support.
Respiratory testing remains a key swing factor as lower demand pressures revenues and margins.
QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by mixed first-quarter 2026 results, is expected to contribute further, along with progress in cost-saving initiatives. However, risks due to overdependence on the respiratory business persist.
This Zacks Rank #3 (Hold) company has lost 50.5% in the year-to-date period compared with the 23.2% decline of the industry. The S&P 500 has witnessed 10.5% growth in the said time frame.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $993.5 million. QuidelOrtho’s earnings yield of 13.8% compares favorably with the industry’s 3.5%. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met estimates once, delivering an average negative surprise of 15.7%.
Image Source: Zacks Investment Research
Factors Favoring QDEL’s Growth
Robust Product Portfolio: QuidelOrtho’s diversified portfolio across Labs, Immunohematology, Point of Care and Molecular Diagnostics helps cushion demand fluctuations across testing categories. In the first quarter of 2026, Labs remained the largest revenue contributor at $353.1 million, followed by Immunohematology at $138.3 million and Point of Care at $112.8 million.
The company's Sofia platform and QuickVue franchise continue to provide scale in respiratory testing, with management noting stable market share during the quarter. For 2026, QuidelOrtho expects a typical flu season and stable testing protocols, with guidance based on a 50-55 million annual flu testing market and flat COVID-related revenues compared with 2025.
Growth initiatives remain focused on menu expansion and international penetration, with the U.S. launch of its high-sensitivity troponin assay already reaching more than 300 customer shipments and the rollout of the VITROS 450 system targeting lower-volume laboratories, which management believes can drive mid-single-digit long-term growth in the Labs business.
Progress on Cost-Saving Initiatives: QuidelOrtho is leveraging restructuring and productivity initiatives to expand margins and support investments in new platforms. In first-quarter 2026, adjusted operating expenses declined 2% year over year, led by a 19% reduction in R&D spending, while management reaffirmed its full-year adjusted EBITDA margin target of approximately 23%.
Through its Optimization Plan, the company is pursuing procurement efficiencies, facility consolidation and distribution rationalization, expecting around $50 million in net cost savings through 2027 despite cumulative pre-tax charges of about $100 million. QuidelOrtho is also implementing supply-chain measures to offset tariff-related cost pressures, while the wind-down of its U.S. Donor Screening business, expected to be substantially complete by mid-2026, and normalized working capital are projected to support stronger free cash flow generation in the second half of 2026.
Mixed Q1 Results: QuidelOrtho ended the first quarter of 2026 with mixed results, where revenues surpassed the Zacks Consensus Estimate, but earnings missed significantly. The company continued to witness strength in its Labs and Immunohematology business units, while solid growth across Latin America and resilient performance in EMEA and JPAC were encouraging.
However, persistent weakness in respiratory testing continued to weigh heavily on the top line, with Point of Care and Donor Screening businesses also posting sharp declines. The company’s bottom line deteriorated year over year, while gross and operating margins contracted significantly due to lower volumes and an unfavorable business mix.
Factors That May Offset the Gains for QDEL
Overdependence on Respiratory Segment: Respiratory testing remains a key swing factor for QuidelOrtho’s revenues and profitability despite the post-pandemic reset. First-quarter 2026 results were pressured by a milder and shorter respiratory season, with influenza-like illness visits declining roughly 30% year over year and respiratory revenues totaling $68 million. While management indicated that testing protocols and market share remained stable, suggesting the weakness was demand-driven rather than competitive, the lower respiratory contribution reduced product mix and contributed to a 630-basis point decline in adjusted gross margin.
For 2026, the company assumes a 50-55 million annual flu market and flat COVID revenues versus 2025, but still expects full-year respiratory revenues to decline, implying that even modest shifts in seasonality or testing volumes could continue to create significant variability in quarterly results and cash generation.
Estimate Trend
QuidelOrtho is witnessing a stable estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for its earnings has remained stable at $2.01 per share.
The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $625.4 million, indicating 1.9% growth from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , West Pharmaceutical (WST - Free Report) and Intuitive Surgical (ISRG - Free Report) .
Globus Medical, currently flaunting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2026 adjusted earnings per share (EPS) of $1.12 per share, which surpassed the Zacks Consensus Estimate by 22.1%. Revenues of $759.9 million beat the Zacks Consensus Estimate by 4.0%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an estimated long-term earnings growth rate of 10.2% compared with the industry’s 12.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 26.3%.
West Pharmaceutical, currently sporting a Zacks Rank #1, reported first-quarter 2026 EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
WST has an estimated long-term earnings growth rate of 13.9% compared with the industry’s 9.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%.
ISRG has a long-term estimated growth rate of 14.6% compared with the industry’s 12.6% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
View the Zacks #1 Rank List
Image: Bigstock
Reasons to Retain QuidelOrtho Stock in Your Portfolio for Now
Key Takeaways
QuidelOrtho Corporation (QDEL - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by mixed first-quarter 2026 results, is expected to contribute further, along with progress in cost-saving initiatives. However, risks due to overdependence on the respiratory business persist.
This Zacks Rank #3 (Hold) company has lost 50.5% in the year-to-date period compared with the 23.2% decline of the industry. The S&P 500 has witnessed 10.5% growth in the said time frame.
The renowned rapid diagnostic testing solutions provider has a market capitalization of $993.5 million. QuidelOrtho’s earnings yield of 13.8% compares favorably with the industry’s 3.5%. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met estimates once, delivering an average negative surprise of 15.7%.
Image Source: Zacks Investment Research
Factors Favoring QDEL’s Growth
Robust Product Portfolio: QuidelOrtho’s diversified portfolio across Labs, Immunohematology, Point of Care and Molecular Diagnostics helps cushion demand fluctuations across testing categories. In the first quarter of 2026, Labs remained the largest revenue contributor at $353.1 million, followed by Immunohematology at $138.3 million and Point of Care at $112.8 million.
The company's Sofia platform and QuickVue franchise continue to provide scale in respiratory testing, with management noting stable market share during the quarter. For 2026, QuidelOrtho expects a typical flu season and stable testing protocols, with guidance based on a 50-55 million annual flu testing market and flat COVID-related revenues compared with 2025.
Growth initiatives remain focused on menu expansion and international penetration, with the U.S. launch of its high-sensitivity troponin assay already reaching more than 300 customer shipments and the rollout of the VITROS 450 system targeting lower-volume laboratories, which management believes can drive mid-single-digit long-term growth in the Labs business.
Progress on Cost-Saving Initiatives: QuidelOrtho is leveraging restructuring and productivity initiatives to expand margins and support investments in new platforms. In first-quarter 2026, adjusted operating expenses declined 2% year over year, led by a 19% reduction in R&D spending, while management reaffirmed its full-year adjusted EBITDA margin target of approximately 23%.
Through its Optimization Plan, the company is pursuing procurement efficiencies, facility consolidation and distribution rationalization, expecting around $50 million in net cost savings through 2027 despite cumulative pre-tax charges of about $100 million. QuidelOrtho is also implementing supply-chain measures to offset tariff-related cost pressures, while the wind-down of its U.S. Donor Screening business, expected to be substantially complete by mid-2026, and normalized working capital are projected to support stronger free cash flow generation in the second half of 2026.
Mixed Q1 Results: QuidelOrtho ended the first quarter of 2026 with mixed results, where revenues surpassed the Zacks Consensus Estimate, but earnings missed significantly. The company continued to witness strength in its Labs and Immunohematology business units, while solid growth across Latin America and resilient performance in EMEA and JPAC were encouraging.
However, persistent weakness in respiratory testing continued to weigh heavily on the top line, with Point of Care and Donor Screening businesses also posting sharp declines. The company’s bottom line deteriorated year over year, while gross and operating margins contracted significantly due to lower volumes and an unfavorable business mix.
Factors That May Offset the Gains for QDEL
Overdependence on Respiratory Segment: Respiratory testing remains a key swing factor for QuidelOrtho’s revenues and profitability despite the post-pandemic reset. First-quarter 2026 results were pressured by a milder and shorter respiratory season, with influenza-like illness visits declining roughly 30% year over year and respiratory revenues totaling $68 million. While management indicated that testing protocols and market share remained stable, suggesting the weakness was demand-driven rather than competitive, the lower respiratory contribution reduced product mix and contributed to a 630-basis point decline in adjusted gross margin.
For 2026, the company assumes a 50-55 million annual flu market and flat COVID revenues versus 2025, but still expects full-year respiratory revenues to decline, implying that even modest shifts in seasonality or testing volumes could continue to create significant variability in quarterly results and cash generation.
Estimate Trend
QuidelOrtho is witnessing a stable estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for its earnings has remained stable at $2.01 per share.
The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $625.4 million, indicating 1.9% growth from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , West Pharmaceutical (WST - Free Report) and Intuitive Surgical (ISRG - Free Report) .
Globus Medical, currently flaunting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2026 adjusted earnings per share (EPS) of $1.12 per share, which surpassed the Zacks Consensus Estimate by 22.1%. Revenues of $759.9 million beat the Zacks Consensus Estimate by 4.0%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an estimated long-term earnings growth rate of 10.2% compared with the industry’s 12.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 26.3%.
West Pharmaceutical, currently sporting a Zacks Rank #1, reported first-quarter 2026 EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
WST has an estimated long-term earnings growth rate of 13.9% compared with the industry’s 9.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%.
ISRG has a long-term estimated growth rate of 14.6% compared with the industry’s 12.6% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.