Bruker Corporation
BRKR
has been gaining from a slew of product launches. A solid performance in the first quarter of 2021 and potential in the BSI Nano Group also buoy optimism. However, foreign-exchange fluctuations and a tough competitive landscape are major downsides.
Over the past year, the Zacks Rank #2 (Buy) stock has gained 66.9% compared with the 67.2% growth of the
industry
and 44.3% rise of the S&P 500.
The renowned provider of life science and materials research systems and associated products has a market capitalization of $10.07 billion. The company projects 10.2% growth for the next five years and expects to witness continued improvements in its business. Bruker surpassed the Zacks Consensus Estimates in all the trailing four quarters, the average surprise being 96.63%.
Let’s delve deeper.
Strong Q1 Results:
Bruker’s better-than-expected results in first-quarter 2021 buoy optimism. Revenue growth across all of its segments and geographies looks impressive. Robust acceptance of the company’s GHz-class systems bodes well. Strength in the company’s microbiology and molecular diagnostics revenues is also encouraging. Expansion of both margins bodes well as well. The company’s current-year financial outlook, with strong growth expectations over 2020, buoys optimism on the stock.
Product Launches:
We are upbeat about the slew of product launches by Bruker over the past few months. The company, in March, launched the Fourier 80 system, which is a next-generation, high-performance 80 MHz Fourier Transform Nuclear Magnetic Resonance benchtop spectrometer for multinuclear gradient spectroscopy, with industry-standard automation options in the United States and Canada. In January, Bruker announced receipt of the FDA’s clearance and the subsequent U.S. launch of the MBT Sepsityper Kit US IVD for rapid microbial identification of various microorganisms from positive blood cultures on the MALDI Biotyper CA System.
In December 2020, the company launched the CE-IVD-labelled FluoroType SARS-CoV-2/Flu/RSV winter four-plex polymerase chain reaction panel in Europe.
Potential in BSI Nano Group:
We are upbeat about the segment’s performance over the past few months. In first-quarter 2021, Bruker’s Nano group witnessed a rebound in its industrial research product lines and recovery in its academic business, which included a modest contribution from the acquired Canopy Biosciences (completed in September 2020). Further, demand for Nano’s microelectronics and semiconductor metrology products remained strong during the quarter.
In March, the company announced that two Luxendo MuVi and LCS SPIM light-sheet microscopes have been installed by Memorial Sloan Kettering Cancer Center. The same month, Bruker completed a majority investment in Acuity Spatial Genomics, which is a new venture focused on opening a new frontier in spatial 3D genomics and multiomic analyses for discovery.
However, downsides might result from Bruker’s exposure to currency movement as it rakes in a significant portion of its sales from international markets. As a consequence, currency fluctuations continue to result in foreign currency transaction losses for the company. In addition, currency fluctuations could cause the price of Bruker’s products to be less competitive than its principal competitors’ offerings.
Bruker faces substantial competition in a consolidating industry and expects competition in all of its markets to increase further. A number of Bruker’s peers have expanded their market share in recent years through business combinations. Other companies may also choose to enter Bruker’s fields of operation in the near future, thus increasing competition.
Estimate Trend
Bruker has been witnessing an upward estimate revision trend for 2021. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 6.9% north to $1.85.
The Zacks Consensus Estimate for second-quarter 2021 revenues is pegged at $514.4 million, suggesting a 21.2% rise from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks from the broader medical space are
Amedisys, Inc.
AMED
,
Illumina, Inc.
ILMN
and
National Vision Holdings, Inc.
EYE
.
Amedisys’ long-term earnings growth rate is estimated at 12%. The company presently carries a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Illumina’s long-term earnings growth rate is estimated at 7%. It currently carries a Zacks Rank #2.
National Vision’s long-term earnings growth rate is estimated at 11.8%. It currently carries a Zacks Rank #2.
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