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Luminex Corporation LMNX is well poised for growth backed by a plethora of regulatory approvals and robust product portfolio. Intense competition has been offsetting the positives to some extent.
Shares of Luminex have gained 23.9% compared with the industry’s rally of 20.2% in a year’s time.
Luminex, with a market capitalization of $1.17 billion, develops, manufactures and markets proprietary biological testing technologies with applications throughout the life sciences and diagnostics industry. It anticipates earnings improvement of 7.4% next year. It has a trailing four-quarter average earnings beat of 30.4%.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
Strong Product Portfolio: Luminex has a broad product portfolio that comprises advanced xMAP, xTAG and Multi Code technologies. Per management, 2020 will be a transformative year for the company owing to three new product launches.
In the second quarter of 2020, the company launched a plethora of new testing solutions in response to the pandemic and anticipates launching several more very soon. At the same time, it continues to invest in the development of core technologies, including its VERIGENE portfolio, xMAP Technology and flow cytometry portfolios. Luminex expanded its sample-to-answer system installed base in the second quarter, with more than 160 systems.
In July 2020,the company delivered the first of its new xMAP INTELLIFLEX Systems to several of its Life Science Research Partners. This marks a significant milestone with respect to the expansion of its xMAP Technology with new functionality to facilitate new applications. By the end of 2020, the company intends to fully commercialize this next generation of xMAP Technology.
Plethora of Regulatory Approvals:In September 2029, the company received the BARDA award for conducting product development work and completing a 510(k) filing for its expanded NxTAG Respiratory Pathogen Panel (RPP), which includes the SARS-CoV-2 virus for high-throughput COVID-19 testing.
In June 2020, the company submitted an EUA request to the FDA for its xMAP SARS-CoV-2 Multi-Antigen IgG assay. The assay has been created to offer additional capacity to detect antibodies in patients who might have been exposed to or infected by SARS-CoV-2. Notably, this COVID-19 antibody test can deliver outstanding results for up to 96 samples in less than three hours and has been developed to run on all xMAP platforms.
In July, the company received EUA from the FDA for its xMAP SARS-CoV-2 Multi-Antigen immunoglobulin class G (IgG) Assay. Clinical laboratories can now utilize this serology assay to detect the presence of antibodies in people affected by the virus causing COVID-19. Notably, this is the company’s third COVID-19 test to receive EUA since March 2020.
These are expected to drive growth in the near term.
What’s Deterring the Stock?
Luminex operates in the highly-competitive life sciences industry. The industry is characterized by rapid and continuous technological innovation. Currently, the companyis facing stiff competition in the respiratory market.
For 2020, the Zacks Consensus Estimate for revenues is pegged at $421.9 million, indicating an improvement of 26.1% from the prior-year period. The same for earnings stands at 81 cents per share, suggesting whopping growth of 485.7% from the year-ago reported figure.
A few better-ranked stocks from the broader medical space include OPKO Health OPK, Surmodics SRDX and Merit Medical Systems MMSI.
OPKO Health’s long-term earnings growth rate is estimated at 12%. The company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Surmodics’ long-term earnings growth rate is estimated at 10%. The company presently carries a Zacks Rank #2.
Merit Medical Systems’ long-term earnings growth rate is estimated at 11.9%. It currently carries a Zacks Rank #2.
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