QIAGEN Sales Grow on Coronavirus Solutions Ahead of Selloff

On May 29, we issued an updated research report on QIAGEN N.V. QGEN. The company's business is getting a strong boost amid the coronavirus outbreak from the flourishing molecular diagnostic market. However, it faces a tough competitive landscape. This apart, strong reliance on relationships with collaborative partners and foreign exchange headwinds are other downsides. The stock currently sports a Zacks Rank #1 (Strong Buy).

QIAGEN has underperformed its industry in the past month. The stock has declined 2.8% compared with the industry’s 1.4% fall.

QIAGEN, which is on the verge of being acquired by Thermo Fisher, exited the first quarter of 2020 with better-than-expected revenues on strong growth across all geographies and operating segments. Instrument sales recorded robust demand for QIAsymphony, QIAcube Connect and QIAstat-Dx. Expansion in operating margin is encouraging as well.

QIAGEN N.V. Price

QIAGEN N.V. price | QIAGEN N.V. Quote

QIAGEN’s efforts to combat the coronavirus pandemic are noteworthy. It has ramped up production capacity for solutions currently being used for testing purposes. It has also extended its support to public health authorities and customers to assess their flexibility, timing and needs for specific regional situations in the outbreak. It has scaled up production of RNA extraction kits and instruments as well as launched the QIAstat-Dx Respiratory SARS-CoV-2 Panel to accelerate the detection of the virus.

Meanwhile, during the first quarter of 2020, QIAGEN’s management approved Thermo Fisher’s proposal to acquire QIAGEN. Per QIAGEN, this acquisition holds potential for better synergy and integration of both companies. The consolidated company, post the successful completion of the acquisition, is expected to accelerate the expansion of its solutions suite to serve customers worldwide.

Post integration, QIAGEN’s robust molecular diagnostics presence with focus on infectious disease testing will complement Thermo Fisher’s existing specialty diagnostics capabilities, including allergy, autoimmunity, transplant diagnostics and clinical oncology testing. The consolidated business is anticipated to provide advanced higher-specificity and more comprehensive tests in a faster way at reduced cost.

On the flip side, dull companion diagnostic co-development projects and QuantiFERON-TB test performances are concerning. A weak solvency position is deterring too. Foreign exchange instability and tough competition are other concerns.

Other Stocks to Consider

A few other top-ranked stocks in the broader medical space are Aphria Inc. APHA, Surmodics, Inc. SRDX and Owens Minor, Inc. OMI.

Aphria’s long-term earnings growth rate is projected to be 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Surmodics’ long-term earnings growth rate is estimated to be 10%. The company presently sports a Zacks Rank #1.

Owens Minor’s long-term earnings growth rate is estimated to be 8.3%. It currently carries a Zacks Rank #2.

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