Here’s Why You Should Retain QIAGEN (QGEN) Stock for Now

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Zacks Investment Research

Here’s Why You Should Retain QIAGEN (QGEN) Stock for Now


QIAGEN N.V. QGEN is gaining from impressive sales growth in the non-COVID-19 product portfolio. The company’s earnings and revenues in the second quarter of 2022 were ahead of the Zacks Consensus Estimate. Robust instrument placements throughout the quarter instill optimism. However, sales decline across several geographies and foreign exchange headwinds raise apprehension.

In the past year, the Zacks Rank #3 (Hold) stock has lost 22.7% against a 42.6% decline of the industry and a 16.1% decline of the S&P 500.

The renowned medical device company has a market capitalization of $9.84 billion. Its earnings in the second quarter of 2022 surpassed the Zacks Consensus Estimate by 13.3%.

In the past five years, the company registered earnings growth of 17.8% compared with the industry’s 17.9% rise and the S&P 500’s 13.4% increase. The company’s long-term projected growth of 15.4% compares with the industry’s growth projection of 18.5% and the S&P 500’s expectation of 11.5% growth.


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Let’s delve deeper.

Factors in Play

Q2 Upsides: QIAGEN ended second-quarter 2022 with better-than-expected earnings and revenues. The uptick in sales in the non-COVID-19 product portfolio contributed to the top-line results. Robust CER gains across China, Australia and South Korea buoy optimism. The QIAcuity digital PCR instrument sales continued at a good momentum in the reported quarter, recording a milestone with more than 1,000 cumulative placements since launch.

The raised full-year 2022 guidance for net sales and earnings per share also raises investors’ confidence.

Huge Potential in Molecular Diagnostics: QIAGEN witnessed robust demand for sample preparation instruments. In sample technologies, instrument sales in the second quarter were supported by strong sales trends for the EZ2 instrument and higher placements of QIAcube Connect. Within diagnostic solutions, QIAGEN’s QuantiFERON-TB sales increased 19% at CER.

QIAstat-Dx sales delivered double-digit CER growth on strong consumables and new placements worldwide. NeuMoDx sales remained well on track to attain the full-year goal of about $80 million CER sales.

Solid NGS Platform Prospects: QIAGEN’s NGS portfolio has been witnessing substantial revenue growth in the past few quarters. In the second quarter, sales of Genomics/NGS (including universal NGS products and bioinformatics solutions) improved 2% CER, excluding the year-ago impact of the genomics technology sale. The company witnessed single-digit CER growth across the non-COVID product groups banking on solid growth in universal NGS consumables.

QIAGEN’s latest partnerships with NHS England and Element Biosciences are expected to add further growth momentum within the genomics business.

Downsides

International Sales Discouraging: In the second quarter, QIAGEN’s revenues from Europe, the Middle East and Africa fell 21% on a reported basis due to the sharp decline in COVID testing trends. Revenues from Asia-Pacific/ Japan fell 6% reportedly as revenues from Japan saw a low-single-digit decline at CER. Sales from the Americas were also down 2% on a reported basis due to lower COVID-19 testing demand.

Competitive Headwinds: Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company faces increasing competition from firms that provide competitive pre-analytical solutions and other products used by its customers.

Forex Woes: Recording 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.

Estimate Trend

In the past 60 days, the Zacks Consensus Estimate for QIAGEN’s 2022 earnings has moved 5.7% north to $2.10.

The Zacks Consensus Estimate for 2022 revenues is pegged at $2.11 billion, suggesting a 6.2% fall from the 2021 reported number.

Key Picks

A few better-ranked stocks in the broader medical space that investors can consider are AMN Healthcare Services, Inc. AMN, ShockWave Medical, Inc. SWAV and McKesson Corp. MCK.

AMN Healthcare has a long-term earnings growth rate of 3.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 15.7%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has outperformed its industry in the past year. AMN has lost 6.9% against the industry’s 39.8% fall.

ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.

ShockWave Medical has outperformed its industry in the past year. SWAV has gained 25% against the industry’s 36.4% fall in the past year.

McKesson has an estimated long-term growth rate of 9.9%. The company surpassed earnings estimates in the trailing three quarters and missed in one, delivering a surprise of 13%, on average. It currently carries a Zacks Rank #2 (Buy).

McKesson has outperformed its industry in the past year. MCK has gained 70.4% against the industry’s 18.8% fall.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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