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Here's Why You Should Invest in OPKO Health (OPK) Stock Now

Zacks Equity Research
·4 min read

OPKO Health, Inc. OPK is well poised for growth on the back of solid prospects in RAYALDEE and BioReference platforms, and strong research and development (R&D) focus.

The stock has gained 16.3%, compared with the industry’s growth of 9.2% in a year’s time. Further, the S&P 500 Index rose 8.7% in the same time frame.

The company — with a market capitalization of $1.44 billion — engages in the diagnostics and pharmaceuticals business in the United States, Ireland, Chile, Spain, Israel and Mexico. It anticipates earnings to improve 20% in second-quarter 2020. Moreover, the company has a trailing four-quarter positive earnings surprise of 2.9%, on average.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).



Key Catalysts

OPKO Health’s BioReference platform is the third largest full-service clinical laboratory. Per management, BioReference Laboratories has been making excellent progress with regard to its top and bottom-line performance. Notably, it is poised for growth in 2020.

With respect to COVID-19 response efforts, the company built a specific expertise in offering testing to over 30 drive-through sites around the country. Further, it entered into partnerships with numerous states, cities and healthcare systems, which included New York State, New York City and the State of New Jersey. OPKO Health has also started to offer COVID-19 antibody blood testing on a nationwide basis from the end of April.

Further, within the pharmaceutical business, RAYALDEE has been OPKO Health’s leading renal product in the U.S. market since the last two years. Per management, total RAYALDEE prescriptions reported by IQVIA improved 78% year over year in the first quarter. Around 280 physicians or above 9% of the total number of prescribers were new RAYALDEE prescribers in the first quarter.

The company is planning a Phase 3 study with RAYALDEE and pediatric patients as part of a post-marketing requirement. Notably, this study is anticipated to commence in third-quarter 2020. The company is optimistic about such efforts as it expects these to expand RAYALDEE’s label and further bolster its market presence to become a meaningful contributor to sales and earnings for OPKO Health.

OPKO Health’s strong focus on R&D is a positive. The company’s strong commitment toward innovation led to the introduction of several new products, improvements in the existing products, expansion of product lines, and enhancements and new equipment in the R&D facilities. Per management, the company will continue to make solid investments in R&D programs throughout 2020.

Which Way are Estimates Headed?

For 2020, the Zacks Consensus Estimate for revenues is pegged at $879.1million, indicating a decline of 2.5% from the previous year. The same for adjusted loss per share stands at 33 cents.  

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space include Aphria Inc. APHA and HMS Holdings Corp. HMSY and West Pharmaceutical Services, Inc. WST. While Aphria and HMS Holdings carry a Zacks Rank #2 (Buy), West Pharmaceutical sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aphria has an estimated long-term earnings growth rate of 24.6%.

HMS Holdings has an estimated long-term earnings growth rate of 11%.

West Pharmaceutical has a projected long-term earnings growth rate of 9.2%.  

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HMS Holdings Corp (HMSY) : Free Stock Analysis Report
 
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Zacks Investment Research