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Quidel Corp. Message Board

  • wizerdave wizerdave Feb 25, 2013 12:30 AM Flag

    QDEL Set For Drop

    As happens every year, we have a flu season and Quidel's stock price goes up. As also happens every year, the flu season ends, and Quidel's stock price goes down to where it was 4 months or so earlier. According to the CDC, there has been a large decline in flu cases reported in February. The earnings projection was set rather high for the first quarter ending in March. But the flu season came early, so they had their high quarter during the 4th quarter. My guess is they'll reduce expectations for the 1st Q, or analysts will get smart and realize they won't meet expectations and lower their EPS estimates. The price will tank quickly. But even if they meet 1st Q expectations, when you look at the 2nd and 3rd Q EPS estimates, you'll see they expect losses. That's how their year always goes - except rare years when we have a very mild flu season and they have 4 Qs of losses.

    Sentiment: Sell

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    • This year Quidel is selling an entirely new set of tests on platforms that will be used throughout the year. The revenue stream from the molecular testing platforms will double the revenue of this company over the next two years. Your shorting strategy in terms of the seasonal salaes of influenza may not work out this year. LIsten to the two conference calls scheduled next week in Boston, and you may have a more accurate sense of what's the prospects for Quidel.

      • 1 Reply to qdelfan
      • Wow! You say the new products will "Double the revenue...over the next two years." Unfortunately this contradicts Quidel's own annual report they just issued. In fact, every year they introduce new products, but the sales and gross margins are "significantly" lower than the flu immunology products. In fact, they state that this isn't expected to change in the near future. I understand you want to keep the price up as long as possible, but this kind of gross misstatement of facts can hurt new Quidel researchers who only want the truth.
        From Annual Report ended 12/31/2012:
        "Our operating results are heavily dependent on sales of our influenza diagnostic tests.
        Although we continue to diversify our products, a significant percentage of our total revenues still continue to come from a limited number of our product families. In particular, revenues from the sale of our influenza tests represent a significant portion of our total revenues and are expected to remain so in at least the near future. In addition, the gross margins derived from sales of our influenza tests are significantly higher than the gross margins from our other core products. As a result, if sales or revenues of our influenza tests decline for any reason—whether as a result of market share loss or price pressure, obsolescence, a mild flu season, regulatory matters or any other reason—our operating results would be materially and adversely affected on a disproportionate basis. For the years ended December 31, 2012, 2011 and 2010, sales of our infectious disease products (including influenza test sales) accounted for 71%, 71% and 61%, respectively, of total revenue.

        Sentiment: Sell

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