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Here's Why You Should Invest in PerkinElmer (PKI) Stock Now
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PerkinElmer, Inc. is gaining investors’ confidence on consistent positive results. In the past year, the company’s shares have outperformed the industry. The stock has inched up 0.8%, against the industry’s 10.9% fall. Also, the company has outperformed the S&P 500’s 7.8% decline.
With a market cap of $8.74 billion, PerkinElmer provides scientific instruments, consumables and services to pharmaceutical, biomedical, environmental testing, chemical as well as general industrial markets worldwide. The company’s long-term earnings growth rate is pegged at 12.4% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Favoring the Stock?
Emerging Markets
PerkinElmer’s presence in the emerging markets of China and India has more than doubled over the last couple of years. This provides the company significant opportunities in these countries.
In the third quarter of 2018, PerkinElmer posted double digit organic revenue growth in Asia. Emerging market revenues are driven by China and India. In fact, for EUROIMMUN, high incidence rates and incremental global customer wins helped China to experience low double-digits organic revenue growth. On a year-to-date basis, PerkinElmer delivered 8% organic revenue growth with EUROIMMUN.
Further, Management confirmed that environmental and applied markets have also experienced strong growth in Asia. In the third quarter, pharma and biotech markets witnessed strong demand in the region.
Improving Margins
PerkinElmer’s gross and operating margin continues to improve primarily on the back of productivity initiatives and volume leverage. The new product introductions are expected to improve product mix and boost gross margin. This along with stringent cost control will continue to drive operating margin in the near term.
In the third quarter of 2018, adjusted gross profit in the quarter came in at $344.1 million, up 24.5% year over year. Adjusted gross margin, as a percentage of revenues, was 51% in the quarter, up 120 basis points (bps) year over year. Adjusted operating income totaled $128.6 million, up 22.2% year over year. Adjusted operating margin, as a percentage of revenues, was 19.1% in the quarter, up 10 bps.
Strong Guidance
For 2018, PerkinElmer expects core organic revenue growth of 6.5%. This includes EUROIMMUN sales of approximately $364 million. Notably, management continues to expect approximately 15% organic revenue growth from EUROIMMUN in 2018.
For the fourth quarter of 2018, management expects reported revenues of $745 million, up 16% on a year-over-year basis. The guidance includes approximately 5% core organic revenue growth and $102-million increase in sales from EUROIMMUN. Earnings per share is expected to come in at $1.16 in the fourth quarter, up 20% year over year.
Which Way Are Estimates Treading?
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.16, reflecting year-over-year increase of 19.6%. The same for revenues is at $746.1 million, indicating rise of 16.3% year over year.
For 2018, the Zacks Consensus Estimate for earnings is pegged at $3.60, reflection growth of 24.1% year over year. The same for revenues is at $2.77 billion.
A few other top-ranked stocks in the broader medical space are Veeva Systems Inc (VEEV - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and OPKO Health, Inc (OPK - Free Report) .
Integer topped our quarterly earnings estimates in the trailing four quarters with an average of 9.7%. It currently carries a Zacks Rank #2.
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock presently sports a Zacks Rank of 1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Here's Why You Should Invest in PerkinElmer (PKI) Stock Now
PerkinElmer, Inc. is gaining investors’ confidence on consistent positive results. In the past year, the company’s shares have outperformed the industry. The stock has inched up 0.8%, against the industry’s 10.9% fall. Also, the company has outperformed the S&P 500’s 7.8% decline.
With a market cap of $8.74 billion, PerkinElmer provides scientific instruments, consumables and services to pharmaceutical, biomedical, environmental testing, chemical as well as general industrial markets worldwide. The company’s long-term earnings growth rate is pegged at 12.4% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Favoring the Stock?
Emerging Markets
PerkinElmer’s presence in the emerging markets of China and India has more than doubled over the last couple of years. This provides the company significant opportunities in these countries.
In the third quarter of 2018, PerkinElmer posted double digit organic revenue growth in Asia. Emerging market revenues are driven by China and India. In fact, for EUROIMMUN, high incidence rates and incremental global customer wins helped China to experience low double-digits organic revenue growth. On a year-to-date basis, PerkinElmer delivered 8% organic revenue growth with EUROIMMUN.
Further, Management confirmed that environmental and applied markets have also experienced strong growth in Asia. In the third quarter, pharma and biotech markets witnessed strong demand in the region.
Improving Margins
PerkinElmer’s gross and operating margin continues to improve primarily on the back of productivity initiatives and volume leverage. The new product introductions are expected to improve product mix and boost gross margin. This along with stringent cost control will continue to drive operating margin in the near term.
In the third quarter of 2018, adjusted gross profit in the quarter came in at $344.1 million, up 24.5% year over year. Adjusted gross margin, as a percentage of revenues, was 51% in the quarter, up 120 basis points (bps) year over year. Adjusted operating income totaled $128.6 million, up 22.2% year over year. Adjusted operating margin, as a percentage of revenues, was 19.1% in the quarter, up 10 bps.
Strong Guidance
For 2018, PerkinElmer expects core organic revenue growth of 6.5%. This includes EUROIMMUN sales of approximately $364 million. Notably, management continues to expect approximately 15% organic revenue growth from EUROIMMUN in 2018.
For the fourth quarter of 2018, management expects reported revenues of $745 million, up 16% on a year-over-year basis. The guidance includes approximately 5% core organic revenue growth and $102-million increase in sales from EUROIMMUN. Earnings per share is expected to come in at $1.16 in the fourth quarter, up 20% year over year.
Which Way Are Estimates Treading?
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.16, reflecting year-over-year increase of 19.6%. The same for revenues is at $746.1 million, indicating rise of 16.3% year over year.
For 2018, the Zacks Consensus Estimate for earnings is pegged at $3.60, reflection growth of 24.1% year over year. The same for revenues is at $2.77 billion.
PerkinElmer, Inc. Price and Consensus
PerkinElmer, Inc. Price and Consensus | PerkinElmer, Inc. Quote
Other Key Picks
A few other top-ranked stocks in the broader medical space are Veeva Systems Inc (VEEV - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and OPKO Health, Inc (OPK - Free Report) .
Veeva Systems’ long-term earnings growth rate is projected at 19.5%. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer topped our quarterly earnings estimates in the trailing four quarters with an average of 9.7%. It currently carries a Zacks Rank #2.
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock presently sports a Zacks Rank of 1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>