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Here's Why You Should Retain QIAGEN (QGEN) in Your Portfolio

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With a market capitalization of approximately $8.70 billion, QIAGEN N.V. (QGEN - Free Report) offers one of the broadest portfolios of molecular technologies for human healthcare. We are specifically upbeat about QuantiFERON-TB test maintaining a dynamic double-digit growth pace and the company being on track with its target for $300 million of annual sales by 2020.

Which Way Are Estimates Treading?

For the current quarter, the Zacks Consensus Estimate for earnings is pegged at 34 cents, reflecting an increase of 6.3% on a year-over-year basis. The same for revenues is pegged at $382.2 million, reflecting an increase of 5% year over year.

For 2018, the Zacks Consensus Estimate for earnings is pegged at $1.34, reflecting a year-over-year increase of 5.5%. The same for revenues is pegged at $1.52 billion, showing a rise of 7.5%.

The stock currently has a Zacks Rank #3 (Hold). Here, we take a quick look at the primary factors that have been plaguing QIAGEN and discuss the prospects that ensure near-term recovery of the stock.

Why Should You Retain QIAGEN?

QIAGEN has highlighted certain strategies to boost top-line contributions from the next-generation sequencing (NGS) portfolio to $140 million in 2018 from more than $115 million in 2017. Notably, the platform has been witnessing double-digit revenue growth over the past few quarters.

QIAGEN also aims at strengthening the portfolio of l multiplex QIAseq NGS panels for use on any NGS sequencer. Moreover, QIAGEN plans continuous updates on its QIAGEN Clinical Insight (QCI) platform to broaden its Sample to Insight portfolio for NGS.

We are also upbeat about the company’s progress with the testing menu expansion strategy. In May, the company globally launched DNeasy PowerSoil Pro Kit, the next generation of sample technology for the extraction of fungal and bacterial DNA from a range of soil samples. 

Encouragingly, QIAGEN markets products in more than 100 countries. In the second quarter of 2018, the company witnessed growth across all international regions. Furthermore, its commitment to return more to shareholders through increased repurchases reflects its solid cash position. 

What's Deterring The Stock?

QIAGEN is exposed to stiff competition. The company is facing severe rivalry from firms providing similar pre-analytical solutions and other products. This incites cut-throat competition within the industry. QIAGEN's woes are aggravated by the highly aggressive and price sensitive markets for some of its products. Also, heavy reliance on collaborations is a concern.

Consequently, QIAGEN has underperformed the industry in the past three months. The company’s shares have returned 0.4% in comparison to industry's gain of 2.8%. The current level is lower than the S&P 500’s return of 3.6%.

Key Picks

Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .

Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock carries a Zacks Rank of 1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amedisys’ long-term expected earnings growth rate is 18.6%. The stock holds a Zacks Rank #1 at the moment.

Masimo’s long-term expected earnings growth rate is 14.8%. The stock holds a Zacks Rank #2 at present.

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