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Bio-Rad (BIO) to Report Q4 Earnings: What's in the Cards?

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Bio-Rad Laboratories, Inc. BIO is slated to report fourth-quarter and full-year 2020 results on Feb 11, after the closing bell.

In the last-reported quarter, the company’s earnings per share (“EPS”) of $3.00 surpassed the Zacks Consensus Estimate by 62.2%. Moreover, its earnings surpassed the consensus estimate in three of the last four quarters and lagged the same in one. The trailing four-quarter average surprise is 29.19%.

Factors at Play

Bio-Rad had earlier confirmed that the pandemic had resulted in a pronounced change in product demand across the company’s portfolio. Over the pandemic months, the company has been witnessing robust demand for COVID-19 testing and research-related products.

With the resurgence of the pandemic in November and December, this demand is expected to have maintained strength during the fourth quarter, thus driving up revenues of the company. Robust sales of Bio-Rad’s core Polymerase Chain Reaction (“PCR”) and Droplet Digital PCR products, and Process Media are likely to have maintained momentum in the fourth quarter as well, similar to the past few months. These factors are expected to have made significant contributions to the top line. However, the top line is likely to have been hampered by the lower demand for products across the rest of its business.

BioRad Laboratories, Inc. Price and EPS Surprise

BioRad Laboratories, Inc. Price and EPS Surprise
BioRad Laboratories, Inc. Price and EPS Surprise

BioRad Laboratories, Inc. price-eps-surprise | BioRad Laboratories, Inc. Quote

We are optimistic about the gradual recovery of the company’s Life Science and Diagnostics products across geographies over the past few months. Also, the gradual reopening of the academic, diagnostics and biopharma labs over the past few months are likely to have driven up the company’s top line in the to-be-reported quarter. However, the continued softness in the Diagnostics Group looms large on the company’s fourth-quarter revenues.

Bio-Rad, during its last-reported quarter’s earnings call in October, confirmed the launch of two new PCR systems — the CFX Opus 96 and the CFX Opus 384 — the previous month. These products are likely to have registered strong customer adoptions in the to-be -reported quarter, thus adding to the top line.

Although the company experienced some supply chain disruptions during the initial phase of the pandemic, since the middle of the second quarter, it ramped up production to meet increased demand of mainly its PCR instruments and reagents. This uptrend is expected to have continued to reflect in the company’s fourth-quarter results.

Bio-Rad’s SARS-CoV-2 Total Ab test, which is a blood-based immunoassay kit to help determine if an individual has developed antibodies to SARS-CoV-2, is expected to have continued to witness robust customer adoption amid the pandemic. Notably, this test got both the FDA’s Emergency Use Authorization (“EUA”) and CE Mark approval. Another test which is likely to have driven up the top line in the to-be-reported quarter is the SARS-CoV-2 Droplet Digital PCR (ddPCR) test kit, launched in May 2020 post receipt of the FDA’s EUA. These are likely to have considerably driven up the fourth-quarter revenues.

However, the Clinical Diagnostics segment is expected to have experienced weakness across all its product lines due to reduced demand from lower non-critical hospital and clinic visits.

Bio-Rad has rallied 11.9% compared with the industry’s 6.7% growth and the S&P 500's 11.6% rise between the period from October to December 2020 despite the challenges posed by the pandemic.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter 2020 revenues is pegged at $681.8 million, suggesting a 9.2% rise from the year-ago figure.

The Zacks Consensus Estimate for the company’s fourth-quarter 2020 EPS of $3.10 suggests an improvement of 33.6% from the year-ago figure.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Bio-Rad has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

Option Care Health, Inc. OPCH has an Earnings ESP of +34.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Radius Health, Inc. RDUS has an Earnings ESP of +10.54% and a Zacks Rank of 2, at present.

DENTSPLY SIRONA Inc. XRAY has an Earnings ESP of +4.45% and is a Zacks #2 Ranked stock.

Breakout Biotech Stocks with Triple-Digit Profit Potential

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