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

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  • QGEN
  • TMO
  • LH
  • MEDP

QIAGEN N.V. QGEN is well poised for growth in the coming months, backed by its progress with testing solutions. The company ended the third quarter of 2021 with better-than-expected results. However, competitive headwinds and foreign exchange woes remain.

Over the past year, the Zacks Rank #3 (Hold) stock has gained 8.2% against the 26.8% decline of the industry and a 25.6% rise of the S&P 500.

The renowned provider of sample to insight solutions has a market capitalization of $12.18 billion. Over the past five years, the company registered earnings growth of 14.6% compared with the industry’s 14.4% rise. The company’s long-term projected growth of 11.5% compares with the industry’s growth projection of 19%.

Riding on current business growth and bullish near-term prospects, the company is worth holding on to for now.

Factors at Play

Impressive Q3 Results: QIAGEN exited the third quarter of 2021 with better-than-expected revenues and earnings. The company registered revenue growth across all geographies and operating segments in the third quarter. The top-line growth during the quarter was driven by 17% CER sales growth in the non-COVID product group as well as a stronger-than-expected uptake for COVID-19 testing solutions. Sales of diagnostic solutions improved 35% at CER, led by the QuantiFERON latent tuberculosis (TB) test. An increase in the short-term cash level is an added plus.

Progress With Test Menu Expansion: QIAGEN is progressing well with its testing menu expansion strategy.

In August 2021, QIAGEN received emergency use authorization (EUA) from the FDA for its QIAreach SARS CoV-2 Antigen Test. The QIAreach SARS CoV-2 Antigen Test can detect SARS CoV-2 antigen in people with active infections in 2-15 minutes and process an average of 30 swab samples per hour. In July 2021, the company announced the receipt of CE-IVD certification for its NeuMoDx HAdV Quant Assay that allows the detection and quantification of human adenovirus (HAdV) DNA in European Union and other countries that accept this marking.

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Raised Guidance: In November, QIAGEN updated its full-year view taking into account stronger-than-expected results for the third quarter of 2021.
Full-year net sales are now expected to grow at least 15% at CER (an increase from the earlier outlook of CER growth of 12%). Adjusted earnings per share (EPS) for 2021 are now expected to be a minimum of $2.48 at CER (up from the prior outlook of about $2.42 at CER).

Downsides

On the flip side, some factors have been deterring the stock’s rally of late.

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

Foreign Exchange Uncertainties: 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 that of high-focus nations.

Estimate Trend

QIAGEN has been witnessing a positive estimate revision trend for 2021. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved 2.9% north to $2.52.

The Zacks Consensus Estimate for 2021 revenues is pegged at $2.17 billion, suggesting a 16.1% rise from the year-ago reported number.

Key Picks

A couple of better-ranked stocks from the broader medical space are Thermo Fisher Scientific Inc. TMO, Laboratory Corporation of America Holdings, or LabCorp LH and Medpace Holdings, Inc. MEDP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher Scientific, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%.

Thermo Fisher has an estimated long-term growth rate of 14%. TMO surpassed estimates in the trailing four quarters, the average surprise being 9.02%.

LabCorp, carrying a Zacks Rank #2, reported third-quarter 2021 adjusted EPS of $6.82, which surpassed the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the Zacks Consensus Estimate by 13.4%.

LabCorp has an estimated long-term growth rate of 10.6%. LH surpassed estimates in the trailing four quarters, the average surprise being 25.7%.

Medpace reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%.

Medpace has an estimated long-term growth rate of 16.4%. MEDP surpassed estimates in the trailing four quarters, the average surprise being 11.9%. It currently sports a Zacks Rank #1.


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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

QIAGEN N.V. (QGEN) : Free Stock Analysis Report

Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report

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