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Qiagen (QGEN) Up 1.6% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Qiagen (QGEN). Shares have added about 1.6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qiagen due for a pullback? 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 drivers.

QIAGEN Q1 Earnings and Revenues Top, Margins Rise

QIAGEN N.V.’s first-quarter 2024 adjusted earnings per share were 46 cents and 47 cents at constant exchange rate (CER), down 9.8% year over year. However, the figure topped the Zacks Consensus Estimate by 4.6%.

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The adjustment excludes the impact of certain non-recurring items like business integration, acquisition and restructuring-related expenses, purchased intangible amortization expenses and non-cash interest expense charges, among others.

The GAAP earnings per share for the quarter was 36 cents, down 2.7% year over year.

Revenues in Detail

Quarterly net sales were down 5.5% year over year to $458.8 million (down 5% at CER). The top line beat the Zacks Consensus Estimate by 0.7%. Sales at CER were $462 million, ahead of the outlook of at least $455 million.

Geographical Revenue Analysis

Sales from the Americas (50.9% of sales) totaled $234 million, down 5% year over year and at CER.

Revenues from Europe, the Middle East and Africa (33.3%) were down 2% on a reported basis and at CER to $155 million. Sales in the non-COVID product groups declined at a low-single-digit CER.

Revenues from Asia-Pacific/Japan (15.7%) fell 13% year over year on a reported basis (down 9% at CER) to $72 million.

Segmental Details

As of the first quarter of 2024, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.

Molecular Diagnostics (representing 53.2% of net sales) revenues were down 3% on a reported basis (down 2% at CER) to $244 million.

Life Sciences (46.8%) reported revenues of $215 million, down 8% on a reported basis and at CER).

Operational Update

Adjusted gross profit (excluding the amortization of acquisition-related intangibles) fell 5.1% year over year to $307.1 million.

Meanwhile, adjusted gross margin expanded 28 basis points in the first quarter (bps) to 66.9% on a 6.3% decline in the cost of sales (excluding amortization) to $151.7 million.

Sales and marketing expenses fell 3.1% year over year to $111.1 million. R&D expenses of $51.3 million were down 6.2% year over year.  G&A expenses declined 16.3% year over year to $27.6 million. Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring, and integration and others) decreased 3.4% year over year to $117 million. Meanwhile, adjusted operating margin expanded 54 bps to 25.5%.

Financial Update

QIAGEN exited the first quarter of 2024 with cash and cash equivalents and short-term investments of $893.1 million compared with $1.05 billion at the end of fourth-quarter 2023. The long-term debt (net of current portion) was $912.8 million at the end of the first quarter of 2024 compared with $921.8 million at the end of fourth quarter 2023.

The cumulative net cash provided by operating activities at the end of the first quarter of 2024 was $133.1 million compared with $71.9 million in the year-ago period.

Guidance

QIAGEN reaffirmed its financial outlook for 2024.

Full-year net sales are expected to be nearly $2.0 billion at CER. 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 $2.00 billion.

The adjusted earnings per share is expected to be at least $2.10 at CER. The Zacks Consensus Estimate is pegged at $2.09.

The company also provided second-quarter 2024 outlook. QGEN estimates net sales of at least $495 million at CER. The Zacks Consensus Estimate is pegged at $494.9 million.

The adjusted earnings per share is expected to be at least 52 cents at CER. The Zacks Consensus Estimate is pegged at 51 cents.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Qiagen has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. 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, Biogen Inc. (BIIB), has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Biogen reported revenues of $2.29 billion in the last reported quarter, representing a year-over-year change of -7%. EPS of $3.67 for the same period compares with $3.40 a year ago.

For the current quarter, Biogen is expected to post earnings of $3.97 per share, indicating a change of -1.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Biogen. Also, the stock has a VGM Score of B.

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QIAGEN N.V. (QGEN) : Free Stock Analysis Report

Biogen Inc. (BIIB) : Free Stock Analysis Report

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