QIAGEN’s QGEN business is expected to benefit from its expanded test menu of key platforms and strategic collaborations. Yet, the company faces a challenging macro environment. An intense competitive environment and exchange rate fluctuations may dent the results of operations. The stock carries a Zacks Rank #3 (Hold).
Factors Driving QGEN Stock
QIAGEN’s long-term business strategy involves entering into strategic alliances as well as marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of certain of their existing and potential products.
In September 2024, the company announced a collaboration with Eli Lilly and Company to support the development of a QIAstat-Dx in-vitro diagnostic (IVD) to detect APOE genotypes, which can play a key role in Alzheimer’s disease diagnosis. The company also extended its strategic partnership with Bio-Manguinhos/Fiocruz to enhance malaria and dengue detection in Brazil’s national screening programs. Another agreement expands collaboration with AstraZeneca beyond oncology to develop and commercialize CDx in chronic diseases.
To support internal growth, QIAGEN invests heavily in research and development (R&D) for the menu expansion of its key platforms. R&D expenditures represented 8.9% of third-quarter sales, with anticipation of a further rise in the coming months as the company pursues regulatory approvals of certain assays or instruments. QIAGEN marked several important product launches and key milestones, which position it well to meet its 2028 goals. Particularly, QIAstat drove 40% CER sales growth from increasing demand worldwide and more than 150 placements of instruments.
In September, the QIAstat-Dx syndromic testing systems and associated assays received CE-marking under the European Union's new In-Vitro Diagnostic Medical Devices Regulation (IVDR). Building on the success in syndromic testing, QIAGEN is also expanding the ecosystem for QIAstat into precision medicine, signing a number of pharma collaborations to use this technology in precision medicine applications.
QIAGEN N.V. Price
QIAGEN N.V. Price
QIAGEN N.V. price | QIAGEN N.V. Quote
Molecular testing is the most dynamic segment of the global in vitro diagnostics market. QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare. The range of assays for diseases and biomarkers speeds up and simplifies laboratory workflow and standardizes many lab procedures.
QGEN has more than 30 master collaboration agreements with pharmaceutical industry customers, some with multiple co-development projects. In the third quarter of 2024, sales in the Diagnostic Solutions product group grew 10% compared to the year-ago period, driven by solid gains in consumables sales. The QuantiFERON test delivered its sixth consecutive quarter of sales above $100 million, supported by solid demand in all regions from conversion gains against the tuberculin skin test.
Year to date, shares of QGEN have risen 0.5% against the industry’s 13.1% decline. The company continues to benefit from favorable molecular diagnostics industry dynamics. With its consistent focus on expansion through strategic collaborations and research and development, we expect the stock to gain further momentum in the coming days.
Factors Impeding QGEN's Growth
QIAGEN currently markets products in more than 100 countries. Its international operations are subject to a variety of risks arising from the economy, political outlook, language and cultural barriers in the countries it operates. In many of these emerging markets, QIAGEN faces several risks, which include economies dependent on only a few products and therefore subject to significant fluctuations, weak legal systems that may affect its ability to enforce contractual rights, exchange controls, unstable governments and privatization or other government actions affecting the flow of goods and currency. In the quarter under review, sales in the Asia Pacific, Japan and the Rest of World region declined 2% year over year, reflecting challenging macro demand trends in China.
Recording more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may drag down the top and the bottom line further in the future. For instance, foreign currency transactions in the third quarter of 2024 resulted in net losses of $1.1 million. The company continues to expect currency movements against the U.S. dollar to have a negative impact on full-year net sales of about 1% point and an adverse impact of about 2 cents per share on adjusted EPS results.
Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company is facing increasing competition from firms that provide competitive pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price-sensitive. Other product suppliers may have significant advantages in terms of financial, operational, sales and marketing resources and experience in research and development.
Key Picks
Some better-ranked stocks in the broader medical space are Penumbra PEN, Haemonetics HAE and Phibro Animal Health PAHC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Penumbra shares have declined 7.6% in the past year. Estimates for the company’s 2024 earnings per share have increased 2 cents to $2.81 in the past 30 days. PEN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.54%. In the last reported quarter, it posted an earnings surprise of 23.19%.
Estimates for Haemonetics’ fiscal 2025 earnings per share have remained constant at $4.59 in the past 30 days. Shares of the company have dropped 10.9% in the past year against the industry’s growth of 11.3%. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.82%. In the last reported quarter, it delivered an earnings surprise of 2.75%.
Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have increased 1.9% to $1.62 in the past 30 days. Shares of the company have surged 85.6% in the past year compared with the industry’s 11.3% rise. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 25.47%. In the last reported quarter, it delivered an earnings surprise of 52.17%.
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