On Aug 26, we issued an updated research report on Bruker Corporation BRKR. The company’s recent acquisition and collaborations are a strategic fit. However, currency fluctuations remain a drag. The stock carries a Zacks Rank #3 (Hold).
Bruker ended the second quarter with better-than-expected earnings. The successful installation and customer acceptance of the Avance system bode well. The potential of the Nano Group, PCI and the MALDI Biotyper is also encouraging.
The company has several Bruker NANO products that are being assembled and tested in Malaysia and by 2022, management expects more than $50 million of revenues to be generated from Penang.
In May, Bruker launched the world’s first commercial MALDI-2 post-ionization (PI) source, which is now available as an option on the timsTOF fleX ESI/MALDI mass spectrometer. It also launched additional unique TIMS/PASEF-enabled 4D proteomics methods.
The same month, the company announced the successful installation and customer acceptance of the world’s first Avance NEO1.2 GHz NMR system in Italy. In July, the same was announced in Switzerland.
Further, Bruker has been making notable efforts to combat the coronavirus crisis. Its microbiology and infectious disease diagnostics portfolio has added a SARS-CoV-2 PCR test and the NMR and mass spec systems, which are used in critical disease, therapeutic and vaccine research.
Bruker, in July, launched its FluoroType SARS-CoV-2 plus next-generation 6-plex PCR assay for higher specific detection of the SARS-CoV-2 virus. Notably, the assay has already received the CE Mark and is available on the Bruker Hain FluoroCycler XT real-time PCR system as well as on other commonly available thermocyclers.
On the flip side, a year-over-year fall in revenues in all reporting segments and major geographies due to business disruptions is concerning. Contraction of both margins is also worrying. The company’s inability to provide any financial guidance also raises apprehensions. However, exposure to foreign exchange fluctuations, stiff competition and macroeconomic woes pose challenges to Bruker.
The company’s exposure to the foreign exchange fluctuations is a cause of concern as it conducts the majority of its business in international markets. Further, a competitive landscape and supply issues stemming from the coronavirus pandemic pose persistent challenges to the company.
Over the past six months, Bruker has underperformed the industry it belongs to. The stock has lost 4.9% against the industry’s 20.9% rise.
Key Picks
Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, LHC Group, Inc. LHCG and Thermo Fisher Scientific Inc. TMO.
QIAGEN’s long-term earnings growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
LHC Group’s long-term historical earnings growth rate is pegged at 23.3%. The company presently sports a Zacks Rank #1.
Thermo Fisher’s long-term earnings growth rate is estimated at 15%. It currently carries a Zacks Rank #2 (Buy).
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