Let’s dig into the relative performance of Avantor (NYSE:AVTR) and its peers as we unravel the now-completed Q4 research tools & consumables earnings season.
The life sciences subsector specializing in research tools and consumables enables scientific discoveries across academia, biotechnology, and pharmaceuticals. These firms supply a wide range of essential laboratory products, ensuring a recurring revenue stream through repeat purchases and replenishment. Their business models benefit from strong customer loyalty, a diversified product portfolio, and exposure to both the research and clinical markets. However, challenges include high R&D investment to maintain technological leadership, pricing pressures from budget-conscious institutions, and vulnerability to fluctuations in research funding cycles. Looking ahead, this subsector stands to benefit from tailwinds such as growing demand for tools supporting emerging fields like synthetic biology and personalized medicine. There is also a rise in automation and AI-driven solutions in laboratories that could create new opportunities to sell tools and consumables. Nevertheless, headwinds exist. These companies tend to be at the mercy of supply chain disruptions and sensitivity to macroeconomic conditions that impact funding for research initiatives.
The 10 research tools & consumables stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 21.9% since the latest earnings results.
Weakest Q4: Avantor (NYSE:AVTR)
With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.
Avantor reported revenues of $1.69 billion, down 2.1% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a softer quarter for the company with a miss of analysts’ organic revenue estimates.
Avantor Total Revenue
Avantor delivered the weakest performance against analyst estimates of the whole group. The stock is down 27.1% since reporting and currently trades at $15.80.
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ:TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Bio-Techne reported revenues of $297 million, up 9% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
Bio-Techne Total Revenue
Bio-Techne pulled off the biggest analyst estimates beat among its peers. The stock is down 27.6% since reporting. It currently trades at $52.56.
With a critical role in ensuring the safety of millions of patients worldwide, Sotera Health (NASDAQGS:SHC) provides sterilization services, lab testing, and advisory services to ensure medical devices, pharmaceuticals, and food products are safe for use.
Sotera Health Company reported revenues of $290.2 million, down 6.5% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and organic revenue in line with analysts’ estimates.
Sotera Health Company delivered the slowest revenue growth in the group. As expected, the stock is down 12% since the results and currently trades at $12.
With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE:MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.
Mettler-Toledo reported revenues of $1.05 billion, up 11.8% year on year. This result topped analysts’ expectations by 3.6%. It was a very strong quarter as it also recorded an impressive beat of analysts’ organic revenue estimates and a narrow beat of analysts’ full-year EPS guidance estimates.
The stock is down 22.3% since reporting and currently trades at $1,051.
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE:DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Danaher reported revenues of $6.54 billion, up 2.1% year on year. This print beat analysts’ expectations by 1.6%. It was a strong quarter as it also put up a solid beat of analysts’ organic revenue estimates.
The stock is down 22.3% since reporting and currently trades at $192.62.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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