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Here's Why You Should Add QIAGEN (QGEN) to Your Portfolio
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QIAGEN N.V. (QGEN - Free Report) has been gaining on robust segmental growth. Its international performance has also been impressive. Its better-than-expected revenues in the first quarter of 2020 buoy optimism. However, downsides may result from its reliance on commercial relationships and a stiff competitive landscape.
Over the past three months, the Zacks Rank #1 (Strong Buy) stock has outperformed its industry. The stock has gained 21.2% compared with 9.8% growth of the industry and 1.5% fall of the S&P 500.
The renowned molecular diagnostics solutions provider has a market capitalization of $9.99 billion. The company projects 12.2% growth for the next five years and expects to maintain strong segmental performance. The company surpassed estimates in two of the trailing four quarters and missed estimates in the other two, the average positive surprise being 1.5%.
Let’s delve deeper.
Strong Q1 Results: QIAGEN’s better-than-expected revenues in the first quarter of 2020 buoy optimism. It registered revenue growth across all geographies and each of its operating segments in the first quarter. Instrument sales were robust for QIAsymphony, QIAcube Connect and QIAstat-Dx. Expansion in operating margin is encouraging as well.
Responding to the coronavirus pandemic, it scaled up RNA extraction kit and instrument production and launched QIAstat-Dx Respiratory SARS-CoV-2 Panel to speed up virus detection.
Promising Sell-off Deal With Thermo Fisher: We are upbeat about the sell-off deal of QIAGEN with Thermo Fisher Scientific Inc. (TMO - Free Report) . Post integration, QIAGEN’s molecular diagnostics presence with focus on infectious disease testing will complement Thermo Fisher’s existing specialty diagnostics capabilities. The consolidated business is anticipated to provide advanced higher-specificity and more comprehensive tests in a faster way at reduced cost.
Further, QIAGEN’s assay and bioinformatics technologies will complement the genetic analysis and biosciences capabilities of the former. This expanded line will significantly boost Thermo Fisher’s research capabilities in life science.
Robust Demand for Testing: We are optimistic about QIAGEN’s strength in demand for products used in COVID-19 testing amid the pandemic. During the first quarter, QIAGEN developed and launched the QIAstat-Dx Respiratory SARS-CoV-2 Panel, which runs on the company’s QIAstat-Dx Analyzer. The expanded test has received CE-IVD registration in Europe, BARDA funding from the U.S. government and FDA’s EUA in the United States.
Further, QIAGEN’s sites in the United States and Europe significantly scaled up production capacity of reagents purchased by other diagnostic companies for use in their own COVID-19 testing solutions.
However, downsides might result from the company’s reliance on commercial relationships. The future level of sales for companion diagnostics depends to a high degree on the commercial success of the related medicines for which the tests have been designed. Further, risks remain that it may be unable to maintain these relationships and its collaborative partners may pursue or develop competing products or technologies, either on their own or in collaboration with others.
Further, QIAGEN is facing intensifying competition from firms providing pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price sensitive as well.
Estimate Trend
QIAGEN has been witnessing a positive estimate revision trend for 2020. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 23.2% north to $1.70.
The Zacks Consensus Estimate for second-quarter 2020 revenues is pegged at $417.9 million, suggesting a 9.5% rise from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks from the broader medical space are Aphria Inc. and Surmodics, Inc. (SRDX - Free Report) .
Surmodics’ long-term earnings growth rate is projected at 10%. The company presently sports a Zacks Rank #1.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Here's Why You Should Add QIAGEN (QGEN) to Your Portfolio
QIAGEN N.V. (QGEN - Free Report) has been gaining on robust segmental growth. Its international performance has also been impressive. Its better-than-expected revenues in the first quarter of 2020 buoy optimism. However, downsides may result from its reliance on commercial relationships and a stiff competitive landscape.
Over the past three months, the Zacks Rank #1 (Strong Buy) stock has outperformed its industry. The stock has gained 21.2% compared with 9.8% growth of the industry and 1.5% fall of the S&P 500.
The renowned molecular diagnostics solutions provider has a market capitalization of $9.99 billion. The company projects 12.2% growth for the next five years and expects to maintain strong segmental performance. The company surpassed estimates in two of the trailing four quarters and missed estimates in the other two, the average positive surprise being 1.5%.
Let’s delve deeper.
Strong Q1 Results: QIAGEN’s better-than-expected revenues in the first quarter of 2020 buoy optimism. It registered revenue growth across all geographies and each of its operating segments in the first quarter. Instrument sales were robust for QIAsymphony, QIAcube Connect and QIAstat-Dx. Expansion in operating margin is encouraging as well.
Responding to the coronavirus pandemic, it scaled up RNA extraction kit and instrument production and launched QIAstat-Dx Respiratory SARS-CoV-2 Panel to speed up virus detection.
Promising Sell-off Deal With Thermo Fisher: We are upbeat about the sell-off deal of QIAGEN with Thermo Fisher Scientific Inc. (TMO - Free Report) . Post integration, QIAGEN’s molecular diagnostics presence with focus on infectious disease testing will complement Thermo Fisher’s existing specialty diagnostics capabilities. The consolidated business is anticipated to provide advanced higher-specificity and more comprehensive tests in a faster way at reduced cost.
Further, QIAGEN’s assay and bioinformatics technologies will complement the genetic analysis and biosciences capabilities of the former. This expanded line will significantly boost Thermo Fisher’s research capabilities in life science.
Robust Demand for Testing: We are optimistic about QIAGEN’s strength in demand for products used in COVID-19 testing amid the pandemic. During the first quarter, QIAGEN developed and launched the QIAstat-Dx Respiratory SARS-CoV-2 Panel, which runs on the company’s QIAstat-Dx Analyzer. The expanded test has received CE-IVD registration in Europe, BARDA funding from the U.S. government and FDA’s EUA in the United States.
Further, QIAGEN’s sites in the United States and Europe significantly scaled up production capacity of reagents purchased by other diagnostic companies for use in their own COVID-19 testing solutions.
However, downsides might result from the company’s reliance on commercial relationships. The future level of sales for companion diagnostics depends to a high degree on the commercial success of the related medicines for which the tests have been designed. Further, risks remain that it may be unable to maintain these relationships and its collaborative partners may pursue or develop competing products or technologies, either on their own or in collaboration with others.
Further, QIAGEN is facing intensifying competition from firms providing pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price sensitive as well.
Estimate Trend
QIAGEN has been witnessing a positive estimate revision trend for 2020. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 23.2% north to $1.70.
The Zacks Consensus Estimate for second-quarter 2020 revenues is pegged at $417.9 million, suggesting a 9.5% rise from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks from the broader medical space are Aphria Inc. and Surmodics, Inc. (SRDX - Free Report) .
Aphria’s long-term earnings growth rate is estimated at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Surmodics’ long-term earnings growth rate is projected at 10%. The company presently sports a Zacks Rank #1.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
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