Bruker Corporation
BRKR
is gaining from strength across the BSI and BEST businesses. Strong bookings and backlog growth in the fourth quarter buoy optimism. The company’s timsTOF platform continues to witness strong adoption in 4D proteomics, epiproteomics and multiomics. However, escalating costs and stiff competition remain concerning.
The renowned medical device company has a market capitalization of $9.65 billion. The company surpassed earnings estimates in the trailing four quarters, the average surprise being 17.4%.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 7% compared with the 2.1% fall of the
industry
and 3.7% fall of the S&P 500 composite.
Let’s delve deeper.
Key Growth Catalysts
Bright BSI Nano Group Prospects:
Bruker’s Nano Group’s microelectronics and semiconductor metrology tools continued to perform well, with ongoing strength in bookings and backlog.
In the first quarter of 2022, revenues in the Nano Group climbed 15.6%. Nano’s academic, industrial and semiconductor metrology markets all remain strong. Revenues for the Nano advanced X-ray and Nano surface tools delivered strong growth in the quarter. Nano’s microelectronics and semicon metrology tools performed well, with strong bookings and backlog.
Strong Prospects for BioSpin:
Bruker BioSpin’s products, which have specific applications in structural proteomics, drug discovery, research, and food and material science fields, provide customers with the ability to ascertain the structure, dynamics and function of specific molecules, such as proteins, as well as to characterize and determine the composition of mixtures. A vast majority of Bruker BioSpin’s customers include academic and government customers, as well as pharmaceutical and biotechnology companies.
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For first-quarter 2022, the BioSpin Group grew in the low-single-digit percentage. The segment saw robust growth in revenues in its preclinical imaging business and achieved double-digit booking growth. BioSpin Systems’ revenues increased significantly year over year, which consisted of revenue recognition on its four gigahertz-class NMR instruments.
Raised Outlook:
Bruker raised its financial outlook for 2022 organic revenue growth, considering the strong demand for its high-performance life science tools, scientific instruments, and diagnostic solutions.
The company expects organic revenue growth of 7.9%. This compares with the previously stated organic revenue growth of 6-8%. The Zacks Consensus Estimate for revenues is pegged at $2.56 billion.
Downsides
Mounting Expenses:
Bruker’s escalating operating expenses are concerning. In the first quarter, selling, general and administrative expenses rose 10.5% year over year, whereas research and development expenses increased 3.7%. The rise in operating expenses hiked adjusted operating expenses 8.4% year over year.
Competitive Landscape:
Bruker faces substantial competition in a consolidating industry and expects competition in all of its markets to increase further. Bruker BioSpin competes with companies that offer magnetic resonance spectrometers, mainly JEOL and Oxford Instruments. In the field of preclinical imaging, Bruker BioSpin faces competitive threats from Perkin Elmer, Mediso, Trifoil, MR Solutions, RS2D, Visualsonics (Fuji Film) and others.
Estimate Trend
Bruker has been witnessing a constant estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for Bruker’s 2022 earnings has been unchanged at $2.31.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $2.57 billion, suggesting a 6.4% rise from the year-ago reported number.
Key Picks
A few better-ranked stocks in the broader medical space are
UnitedHealth Group Incorporated
UNH
,
Medpace Holdings, Inc.
MEDP
and
Alkermes plc
ALKS
.
UnitedHealth, having a Zacks Rank #2 (Buy), reported first-quarter 2022 earnings per share (EPS) of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 14.2%.
You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.
Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank #2.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.
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