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MARKETS LIVE BLOG:

STOCKS RISE, LED BY STELLAR ALPHABET, MICROSOFT EARNINGS

Results from 'Magnificent Seven' duo show cloud revenue boosted by strong AI demand

5 Reasons to Invest in PerkinElmer (PKI) Stock Right Now

Zacks Equity Research
Updated

PerkinElmer, Inc. PKI is one of the top-performing stocks in the MedTech space. Improved price performance and strong fundamentals reflect the stock’s bullish run. Thus, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

The company has performed impressively in the fourth quarter of 2017 and is likely to sustain the momentum in the upcoming period.

Why an Attractive Pick?

Share Price Appreciation

A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourses over the last six months. PerkinElmer’s shares have returned 16.5%, which compares favorably with S&P 500 index’s rally of 7.9%. The current return is also higher than the industry’s gain of 9.9%.

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Northward Estimate Revision

Nine estimates for current-year earnings moved north in the last 30 days, versus no downward revision, indicating analysts’ optimism. During the period, the Zacks Consensus Estimate rose from $3.40 per share to $3.52. The company holds a Zacks Rank #2 (Buy), which indicates robust fundamentals and expectations of outperformance in the near term.

PerkinElmer, Inc. Price and Consensus

 

PerkinElmer, Inc. Price and Consensus | PerkinElmer, Inc. Quote

 

Promising Guidance

Recently, the company has issued its adjusted earnings per share guidance of $3.50 for 2018. Furthermore, revenues are expected to be within the range of $2.72 to $2.74 billion. Organic growth projected for 2018 is 5-6%.

The Zacks Consensus Estimate for earnings of 62 cents for the current quarter which reflects year-over-year growth of 12.7%. Moreover, earnings are expected to register growth of 12.9% in 2019.

The Zacks Consensus Estimate for 2018 revenues is $2.74 billion for the current year, reflecting year-over-year growth of 21.3%. Moreover, revenues are expected to grow 5.7% in 2019.

Improving Operating Margin

PerkinElmer’s operating margin continues to improve on the back of productivity initiatives and volume leverage. A broad spectrum of products along with new product integrations is expected to improve product mix and also drive gross margin. Also, stringent cost control is expected to drive the operating margin further.

Developments

PerkinElmer exited the fourth quarter of 2017 on a solid note, with the Discovery and Analytical solutions segment registering 6.5% organic growth. The upside can be attributed to product introductions and healthy growth across all major regions.

The company has also been benefitting from its latest acquisition of EUROIMMUN Laboratory Diagnostics AG, which majorly drove the Diagnostics segment sales in the reported quarter. The EUROIMMUN alliance has added autoimmune and allergy testing to the company’s portfolio as well as additional infectious disease testing capabilities.

The addition of EUROIMMUN and Tulip diagnostics in 2017 increased the company’s headcount in diagnostics by more than 3000 employees, significantly bolstering its research and development sales and clinical capabilities.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Amphastar Pharmaceuticals Inc. AMPH, HCA Healthcare, Inc. HCA and athenahealth Inc. ATHN. Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Amphastar has an impressive expected long-term growth rate of 25%. In the last six months, the stock has rallied 25.3%.

HCA Healthcare has a projected long-term growth rate of 11.5%. In the last three months, the stock has gained 29.2%.

athenahealth has a long-term growth rate of 23.1%. Over the last three months, the stock has gained 6.8%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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athenahealth, Inc. (ATHN) : Free Stock Analysis Report
 
Amphastar Pharmaceuticals, Inc. (AMPH) : Free Stock Analysis Report
 
PerkinElmer, Inc. (PKI) : Free Stock Analysis Report
 
HCA Holdings, Inc. (HCA) : Free Stock Analysis Report
 
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Zacks Investment Research