Bio-Rad Laboratories, Inc.
BIO
has been gaining from solid recovery in most of its key global markets as well as from an uptick in demand for COVID-related products. The company’s focus on the international market is encouraging. Bio-Rad currently carries a Zacks Rank #2 (Buy).
Over the past year, Bio-Rad has outperformed its
industry
. The stock has lost 5% compared with the industry’s 22.9% fall.
Bio-Rad exited the first quarter of 2022 with better-than-expected earnings and revenues. The company continued to experience recovery in most of its key global markets, with strong growth of Process Media and Droplet Digital PCR products. Further, strength in its key product lines across major geographic regions buoys optimism. Within the Diagnostics arm, the company witnessed recovery in its Immunohematology business. Expansion of both margins is an added plus.
In recent times, Bio-Rad has been deriving more than 60% of its net sales from international markets. Europe happens to be the largest international market for the company. On a geographic basis, the Diagnostics group’s currency-neutral year-over-year sales grew in the Americas and Europe. In the Life Science business, all regions witnessed growth compared with the year-ago quarter. The company also noted the continued gradual capacity improvement at academic and diagnostic labs.
Excluding COVID-related sales, Bio-Rad’s underlying Life Science business’ year-over-year currency-neutral core revenue growth was 12.9% in the first quarter of 2022. The year-over-year growth was driven by Droplet Digital PCR as well as the qPCR business, which is experiencing excellent uptake from Bio-Rad’s new-generation CFX Opus platform.
Further, core Clinical Diagnostics’ year-over-year revenue growth, excluding COVID-related sales, was 1.7% on a currency-neutral basis. The blood-typing and clinical immunology business drove the Diagnostics group’s currency-neutral year-over-year sales increase.
On the flip side, during the first quarter, Bio-Rad’s Life Sciences arm registered a year-over-year decline, primarily attributed to lower qPCR product revenues due to a decline in COVID-related demand. The company-adjusted gross margin was 57.6%, contracting 250 bps. Further, the company-adjusted operating margin was 22%, down 380 bps year over year.
Bio-Rad operates in a highly competitive environment dominated by firms varying from large multinational corporations with significant resources to start-ups. Also, the competitive and regulatory conditions in the company’s markets limit Bio-Rad’s ability to switch to strategies like price increases and staying cost competitive.
Other Stocks to Consider
A few other stocks in the broader medical space that investors can consider 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 sports a Zacks Rank #1.
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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