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Reasons to Add Quidel (QDEL) Stock To Your Portfolio Now

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·4 min read
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Quidel Corporation QDEL has been gaining on the back of its strong diagnostics portfolio. A solid fourth-quarter 2021 performance, along with a few product launches, is expected to contribute further. However, headwinds due to third-party reimbursement policies and overdependence on diagnostic tests persist.

Over the past year, this Zacks Rank #1 (Strong Buy) stock has lost 24% compared with 17.5% fall of the industry. The S&P 500 composite has risen 8.6% in the same time frame.

The renowned rapid diagnostic testing solutions provider has a market capitalization of $4.26 billion. Quidel’s earnings yield of 15.4% compares favorably against the industry’s negative yield. Quidel’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same in the other two, the average surprise being 129.4%.

Zacks Investment Research
Zacks Investment Research


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Let’s delve deeper.

Strong Diagnostics Portfolio: We are optimistic about Quidel’s focus on advancing its diagnostics business to improve human health, which has enabled the company to target market segments that represent significant total-market opportunities. To strengthen its position in the global diagnostics market, Quidel is currently offering rapid immunoassay tests for use in physicians’ offices and other urgent care or alternative site settings.

Molecular diagnostic tests for use in hospitals and Specialized diagnostic solutions (including direct fluorescent assays and culture-based tests) for the clinical virology laboratory are also being offered by Quidel.

Product Launch: We are upbeat about a number of product launches by Quidel over the past few months. During the fourth-quarter 2021 earnings call in February, the company confirmed launching the Savanna MDx instrumented system in select ex-U.S. markets. In Europe, Quidel launched its CE-Marked Savanna multiplex molecular analyzer system and the Savanna RVP4 assay in late 2021. The company plans to launch the Savanna system in the United States in 2022.

Strong Q4 Results: Quidel’s robust fourth-quarter 2021 results buoy optimism. The company recorded strong Specialized Diagnostic Solutions revenues in the quarter, along with robust demand for the QuickVue At-Home COVID-19 test. Robust revenues from the sale of COVID-19 products are also promising. Quidel also entered into a definitive agreement to acquire Ortho Clinical Diagnostics Holdings plc in December 2021, raising our optimism. Strong sales of Quidel’s products are impressive.

Downsides

Third-Party Reimbursement Policies: The end-users of Quidel’s point-of-care products are primarily physicians and other healthcare providers. In the U.S., healthcare providers like hospitals and physicians who purchase diagnostic products, generally rely on third-party payers (mainly private health insurance plans, federal Medicare and state Medicaid) to reimburse all or part of the cost of procedure. Usage of Quidel’s products could be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of such products by their patients’ third-party payers.

Overdependence on Diagnostic Tests: A significant percentage of Quidel’s revenues comes from the sale of COVID-19 and influenza tests, and is expected to remain a significant portion of the company’s total revenues for at least the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results would be adversely affected.

Estimate Trend

Quidel is witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has surged 129.6% north to $15.75.

The Zacks Consensus Estimate for the company’s first-quarter 2022 revenues is pegged at $823.1 million, suggesting a 119.3% improvement from the year-ago quarter’s reported number.

Other Key Picks

A few other top-ranked stocks in the broader medical space include Henry Schein, Inc. HSIC, Allscripts Healthcare Solutions, Inc. MDRX and AMN Healthcare Services, Inc. AMN.

Henry Schein, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average beat being 25.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has gained 29.9% compared with the industry’s 6.5% growth over the past year.

Allscripts has an estimated long-term growth rate of 16.3%. MDRX’s earnings surpassed estimates in the trailing four quarters, the average beat being 64.8%. It currently flaunts a Zacks Rank #1.

Allscripts has gained 42.3% against the industry’s 51.3% fall over the past year.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average beat being 20%. It currently sports a Zacks Rank #1.

AMN Healthcare has gained 31.5% against the industry’s 57.1% fall over the past year.


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Allscripts Healthcare Solutions, Inc. (MDRX) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

Quidel Corporation (QDEL) : Free Stock Analysis Report

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