A month has gone by since the last earnings report for Qiagen (QGEN). Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qiagen 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.
QIAGEN Tops Q3 Earnings and Revenue Estimates
QIAGEN N.V.’s third-quarter 2024 adjusted earnings per share were 57 cents, 58 cents at the constant exchange rate (CER). The reported figure increased 14% from the 2023 comparable figure and topped the Zacks Consensus Estimate by 5.6%.
The adjustment excludes the impact of certain non-recurring items, such as business integration, acquisition and restructuring-related expenses, purchased intangible amortization expenses and non-cash interest expense charges, among others.
On a GAAP basis, earnings per share in the third quarter was 44 cents compared with 34 cents in the year-ago period.
QGEN’s Q3 Revenues
Quarterly net sales were up 5.5% year over year to $501.9 million (up 6% at CER). The top line beat the Zacks Consensus Estimate by 2.3%. Sales at CER were $502 million, ahead of the outlook of at least $495 million.
QGEN’s Q3 Segmental Details
QIAGEN reports through four product groups — Sample technologies, Diagnostic solutions, PCR / Nucleic acid amplification, Genomics / NGS and Other
Sample technologies revenues were up 1% on a reported basis (up 1% at CER) to $162 million. Our model projected $160.4 million for this segment.
Diagnostic solutions revenues were up 10% on a reported basis (same at CER) to $197 million. Our model projected $190.2 million for this segment.
Within this, QuantiFERON revenues were up 10% at CER, while QIAstat-Dx revenues surged 40% at CER. Sales from NeuMoDx fell 10% at CER, while Other sales remained in line with the prior-year quarter.
PCR / Nucleic acid amplification revenues increased 9% on a reported basis (same at CER) to $74 million. Our model projected $68 million for this segment.
Genomics / NGS revenues were $55 million, consistent with the prior-year quarter, both on a reported basis and at CER. Our model projected $64.8 million for this segment.
Other revenues were $14 million, down 3% year over year on a reported basis (up 2% at CER). Our model projected $16.8 million for this segment.
QIAGEN’s Operational Update
In the third quarter, the company’s cost of sales (excluding the amortization of acquisition-related intangibles) increased 11.1%. The adjusted gross profit fell 0.5% year over year to $316.1 million. Meanwhile, the adjusted gross margin contracted 374 basis points (bps) to 62.9%.
Sales and marketing expenses fell 0.2% year over year to $111.3 million. R&D expenses of $44.4 million were down 0.2% year over year. G&A expenses declined 2.6% year over year to $29 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring, integration and others) increased 1.2% year over year to $131 million. Meanwhile, the adjusted operating margin contracted 111 bps to 26.1%.
QGEN’s Financial Update
QIAGEN exited the third quarter of 2024 with cash, cash equivalents and short-term investments of $1.5 billion compared with $1.1 billion at the end of the second quarter.
The long-term debt (net of the current portion) was $1.36 billion at the end of the third quarter of 2024 compared with $908.9 million at the end of the second quarter.
The cumulative net cash provided by operating activities at the end of the third quarter of 2024 was $482 million compared with $308.1 million in the year-ago period.
QIAGEN’s Outlook for 2024 and Q4
Full-year net sales are expected to be at least $1.985 billion (unchanged). Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for revenues is pegged at $1.97 billion.
The adjusted earnings per share is expected to be at least $2.19 at CER (earlier $2.16 CER). The Zacks Consensus Estimate is pegged at $2.15.
For the fourth quarter, the company estimates net sales of at least $520 million at CER compared with $509 million in the fourth quarter of 2023. The Zacks Consensus Estimate is pegged at $522.8 million.
The adjusted earnings is expected to be at least 60 cents per share at CER compared with 55 cents in the fourth quarter of 2023. The Zacks Consensus Estimate is pegged at 59 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Qiagen has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Qiagen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Qiagen belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alkermes (ALKS), has gained 7.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Alkermes reported revenues of $378.14 million in the last reported quarter, representing a year-over-year change of -0.7%. EPS of $0.73 for the same period compares with $0.64 a year ago.
Alkermes is expected to post earnings of $0.82 per share for the current quarter, representing a year-over-year change of +70.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +6.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Alkermes. Also, the stock has a VGM Score of B.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
