Bio-Rad Laboratories, Inc.’s BIO Clinical Diagnostics business is back to its usual growth trajectory post-pandemic while maintaining a strong market position worldwide for key platforms. The company’s QX600 Droplet Digital PCR (ddPCR) platform is currently robust and continues to grow. It also conducts significant international operations, having direct distribution channels in more than 36 countries outside the United States. Yet, ongoing challenges in the biopharma end-market and currency headwinds remain concerns.
In the past year, shares of this Zacks Rank #3 (Hold) company have fallen 24% against the industry’s 11% growth. The S&P 500 composite has seen a 9.9% rise in the same time frame.
The renowned manufacturer and global supplier of clinical diagnostics and life science research products has a market capitalization of $6.72 billion. Bio-Rad’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 28.7%.
Let’s delve deeper.
Tailwinds for Bio-Rad
Clinical Diagnostics Continues to Gain Momentum: The business has now returned to its normalized growth rate post-pandemic, maintaining strong market positions globally for its platforms. Built on its long-standing reputation as a leading blood screening systems provider, Bio-Rad’s IH-500 blood typing system is considered a gold standard in immunohematology labs, offering the highest level of automation. The company introduced the IH-500 NEXT System in 2023, a fully automated system for ID cards to meet emerging demands and challenges in laboratory and health environments.
In 2024, the Clinical Diagnostics Group contributed $1.54 billion in sales, a 3.3% increase on a reported basis, primarily led by increased demand for quality control and blood typing products. On a geographic basis, currency-neutral year-over-year revenues in the diagnostics group reflected growth across all three regions.
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Digital PCR Business Backs Bio-Rad’s Growth: Bio-Rad’s QX600 ddPCR platform is currently robust and continues to expand. In the fourth quarter of 2024, the Droplet Digital PCR franchise grew by mid-single digits and was bolstered by additional IP-related royalties. Moreover, several advancements were made to further expand the ddPCR platform into life science research and clinical diagnostics, such as investing in Geneoscopy to support the launch of their FDA-approved, non-invasive colorectal cancer screening test powered by the ddPCR platform.
BIO’s partnership with Oncocyte enables the commercialization of the company’s transplant monitoring assays, offering laboratory customers a highly sensitive alternative to centralized sequencing test providers. Bio-Rad has also expanded its library of assays for use with ddPCR to advance early diagnosis and monitoring of cancers, cell and gene therapy manufacturing, and food safety monitoring. The company introduced Vericheck assays to support the safe and effective production of cell and gene therapies and acquired Sabre Bio — a novel platform utilizing its core droplet technology that enables high-throughput discovery of novel antibodies and T cell receptors.
Focus on International Markets: In 2024, Bio-Rad’s foreign entities generated 59% of net sales. Despite soft market conditions in the Asia-Pacific regions for the Life Science business, the company remains optimistic about the continued gradual improvement into 2025. Further, the lackluster business scenario in key European markets, primarily due to an unfavorable funding environment in Germany and the United Kingdom, is expected to be gradually offset by a more modest improvement in funding outlooks in France and some other European countries.
What Weighs on Bio-Rad?
Weakness in End Markets: Bio-Rad’s business continues to be negatively impacted by the ongoing challenges affecting the biopharma market and small biotech companies. Although there have been signals of improvement, customers are still cautious about the funding environment and conservative in allocating capital. Large pharmaceutical companies are also implementing cost-saving measures through corporate restructuring and R&D reprioritization. For 2024, the company’s Life Science segment sales registered a 12.6% decline on a currency-neutral basis, mainly from weakness in these end markets.
Exposure to Foreign Currency: Internationally, Bio-Rad’s sales are primarily denominated in local currencies. As a result, the strengthening of the U.S. dollar negatively impacts the company’s consolidated net sales expressed in U.S. dollars. Further, the volatility of other currencies may adversely affect BIO’s operations outside the United States and increase its internal costs to hedge against currency fluctuations.
BIO Stock Estimate Trends
The Zacks Consensus Estimate for Bio-Rad’s 2025 earnings per share (EPS) has decreased 4.7% to $10.30 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $2.58 billion, which indicates a modest 0.6% increase from the year-ago reported number.
Key MedTech Picks
Some better-ranked stocks in the broader medical space are Veracyte VCYT, Hims & Hers Health HIMS and Boston Scientific BSX.
Veracyte has an earnings yield of 3.6% against the industry’s -3.3% yield. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 515.9%. Its shares have rallied 40.1% against the industry’s 7.3% decline in the past year.
VCYT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hims & Hers Health, carrying a Zacks Rank #2 at present, has an earnings yield of 1.9% against the industry’s -7.6%. Shares of the company have surged 115.6% against the industry’s 10.6% decline. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 40.4%.
Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.3%. Shares of the company have rallied 49.4% compared with the industry’s 7.1% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%.
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