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Here's Why You Should Hold on to QIAGEN (QGEN) Stock Now

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QIAGEN N.V. (QGEN - Free Report) has been progressing well with its collaborations and expansion of product portfolio. However, a tough competitive landscape and foreign exchange uncertainties are likely to offset the positives to some extent.

This $7.62-billion worth leader of molecular diagnostics solutions expects an earnings growth rate of 9.1% for the next five years. Also, the company has a trailing four-quarter negative earnings surprise of 0.9%, on average.

Let’s delve deeper into the factors that substantiate the company’s Zacks Rank #3 (Hold).

Progress With Test Menu Expansion: Of late, QIAGEN has been investing in product launches like the recently FDA-approved QIAstat-Dx system. The commercial launch of the integrated PCR system, NeuMoDx 96, is another impressive development. The company currently has 10 CE-IVD assays on NeuMoDx in Europe and aims to offer more assays by 2020-end.


Collaborations to Drive Growth: We are currently upbeat about QIAGEN’s recently-inked 15-year partnership with Illumina in Next-Generation Sequencing (NGS) clinical decision-making. Further, QIAGEN’s alliances with NeoGenomics in the field of cancer genetic testing services and with DiaSorin in automated TB testing are significant.

Solid NGS Platform Projection: QIAGEN’s NGS platform has been witnessing double-digit revenue growth over the past few quarters. Management aims to expand the NGS platform by rapidly scaling-up the new Enterprise Genomics Services. It is also working on the launch of a range of proprietary Digital NGS technology-based new gene panels within the GeneReader system. The company has attained the rights to develop and globally commercialize companion diagnostic and IVD kits on Illumina's MiSeq diagnostic and NextSeq diagnostic systems.

However, there are a few factors deterring the company’s growth.

Competitive Headwinds: Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company is facing intensifying competition from firms that provide pre-analytical solutions and other products used by QIAGEN’s customers. A few of these market rivals are Thermo Fisher, Illumina and Bio-Rad.

Foreign Exchange Uncertainties: Garnering more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may dent the top and the bottom line further.

In the past three months, the company’s shares have underperformed the industry. The stock has rallied 4.8% compared with the industry’s 25% gain.

Which Way Are Estimates Treading?

For the fourth quarter, the Zacks Consensus Estimate is pegged at 44 cents, calling for a 10% rise from the prior-year reported number. The same for revenues stands at $408.9 million, indicating a rise of 1.4% from the prior-year reported figure.

The Zacks Consensus Estimate for 2019 earnings is pegged at $1.40, suggesting 4.5% growth from the year-ago reported figure. The same for revenues stands at $1.52 billion, implying a 28.9% improvement from the year-earlier reported number.

Stocks Worth a Look

A few better-ranked stocks from the broader medical space are Haemonetics Corporation (HAE - Free Report) , West Pharmaceutical Services (WST - Free Report) and Omnicell (OMCL - Free Report) . While Haemonetics sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank  stocks here.

Haemonetics has a projected long-term earnings growth rate of 13.5%.

West Pharmaceutical Services has an expected long-term earnings growth rate of 14%.

Omnicell has a long-term earnings growth rate of 12.5%.

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