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Why Is Luminex (LMNX) Down 0.8% Since Last Earnings Report?

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Zacks Equity Research
·3 min read
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It has been about a month since the last earnings report for Luminex (LMNX). Shares have lost about 0.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Luminex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Luminex Q3 Earnings and Revenues Miss Estimates

Luminex Corporation reported third-quarter 2020 earnings per share of 4 cents, missing the Zacks Consensus Estimate by 80.9%. The company had reported loss per share of 12 cents in the year-ago period.

Revenues came in at $106.1 million, missing the Zacks Consensus Estimate by a marginal 0.2%. However, the top line improved 34.8% on a year-over-year basis.

Total sample-to-answer molecular diagnostics revenues grew 98% from the prior-year quarter.

Segmental Analysis

System Sales

Revenues at this segment totaled $19.5 million, up 28% from the year-ago quarter.

Consumable Sales

This segment accounted for $11.8 million of revenues, down 12% year over year.

Royalty Revenues

Royalty revenues totaled $9.6 million, down 26% on a year-over-year basis.

Assay Revenues

This segment reported revenues worth $55.6 million, up 89% on a year-over-year basis.

Service Revenues

Revenues in the segment amounted to $5.9 million, up 11% from the year-ago quarter.

Other

Other revenues came in at $3.5 million, up 56% from the prior-year quarter.

Financial Update

The company exited third quarter with cash and cash equivalents of $308.5 million, up from $291.7 million on a sequential basis.

Cumulative net cash provided by operating activities at the end of the third quarter of 2020 came in at $39 million, compared with $8.2 million in the year-ago period.

Margins

Gross profit in the reported quarter was $63.4 million, up 51.5% year over year. Gross margin was 59.8%, expanding 658basis points(bps).

The company reported adjusted operating profit of $14.4 million against the year-ago quarter’s adjusted operating loss of $2.9 million.

Guidance

Luminex projects 2020 revenues at $410 million, suggesting growth of 23% from the figure reported in 2019.The Zacks Consensus estimate for the same is pegged at $421.9 million.

Revenues for 2021 are estimated to be at or above $475 million, indicating growth over 15% from Luminex's full year 2020 guidance. The Zacks Consensus Estimate for the same is pegged at $451.5 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -48.96% due to these changes.

VGM Scores

Currently, Luminex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Luminex has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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