3 Reasons to Retain QIAGEN (QGEN) Stock in Your Portfolio
QIAGEN N.V. QGEN is well poised for growth in the coming quarters on the back of product launches. The optimism led by robust third-quarter 2022 performance and a few strategic collaborations in the past few months are expected to contribute further. Headwinds from its reliance on commercial relationships and a stiff competitive landscape persist.
In the past year, this Zacks Rank #3 (Hold) stock has lost 11.5% compared with a 23.1% decline of the industry and a 17.5% fall of the S&P 500 composite.
The renowned molecular diagnostics solutions provider has a market capitalization of $10.99 billion. QIAGEN projects 15.1% growth for the next five years and expects to maintain strong segmental performance. The company surpassed estimates in all the trailing four quarters, the average surprise being 16.8%.
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Let’s delve deeper.
Product Launches: We are upbeat about QIAGEN’s recent product launches. The company, this month, announced the launch of the monkeypox (MPXV) test for its NeuMoDx automated polymerase chain reaction platform — NeuMoDx MPXV Test Strip — to strengthen surveillance and research into the current outbreak in non-endemic regions.
In September, QIAGEN announced new additions to its comprehensive NeuMoDx assay menu for organ transplant-associated viruses — the new assays for identifying and quantifying the Epstein-Barr virus and human herpesvirus 6. The assays have received CE-IVD certification for the European Union and other countries that accept this marking.
Strategic Tie-Ups: We are optimistic about the collaborations entered into by QIAGEN in the past few months. In September, the company inked an agreement with Neuron23 Inc. to develop a companion diagnostic for Neuron23’s brain penetrant leucine-rich repeat kinase inhibitor for Parkinson’s disease.
During first-quarter 2022 earnings call in April, QIAGEN confirmed entering into a collaboration with Element Biosciences Partners to validate its Universal NGS library prep and target enrichment portfolio on the Element AVITI system.
Strong Q3 Results: QIAGEN’s robust results in the third quarter of 2022 instill optimism. The company registered solid growth in its non-COVID-19 portfolio and sales from the Americas during the quarter. Expansion of the adjusted gross margin bodes well. QIAGEN continued seeing broad-based demand for its solutions in molecular research and clinical testing markets globally.
Downsides
Reliance on Commercial Relationships: QIAGEN’s future level of sales for companion diagnostics depends heavily on the commercial success of the related medicines for which the tests have been designed to determine their use in patients. However, the company may be unable to maintain the relationships with its collaborative partners, who may pursue or develop competing products or technologies, either on their own or in collaboration with others.
Stiff Competition: QIAGEN is facing intensifying competition from firms providing pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price sensitive as well.
Estimate Trend
QIAGEN has been witnessing an upward estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.1% north to $2.30.
The Zacks Consensus Estimate for fourth-quarter 2022 revenues is pegged at $482.6 million, suggesting a 17.1% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, ShockWave Medical, Inc. SWAV and McKesson Corporation MCK.
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 8.6% against the industry’s 33.7% decline in the past year.
ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 23.6% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 30.1% against the industry’s 27.4% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 67.1% against the industry’s 12.2% decline over the past year.
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