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QIAGEN (QGEN) Stock Falls on Downbeat Full-Year Guidance

QIAGEN N.V. QGEN stock dropped 3.4% yesterday to close at $48.79, following the company’s preliminary second-quarter 2021 release. The company also significantly trimmed its full-year earnings guidance as well as revenue outlook. The company apprehends that the rapid uptake of COVID-19 vaccination campaigns led to reduced demand for testing.

Q2 Preliminary Results

As per the preliminary update, second-quarter net sales improved 28% (up 24% at constant exchange rate or CER) to $567.3 million. This exceededthe company’s growth expectation of about 20% at CER. The current Zacks Consensus Estimate is pegged at $551.2 million, 2.9% below the preliminary figure.

According to QIAGEN, in the second quarter, currency movements had a positive impact of about four percentage points on sales at actual rates compared to the year-ago result.

For the first half of 2021, preliminary net sales are $1.14 million,signifying an improvement of 39% (increase of 35% at CER).

According to QIAGEN, stronger-than-expected growth trends were seen for non-COVID product groups in the second quarter. This group generated revenues of $407.6 million implying year-over-year improvement of 52% at CER and representing 72% of total sales.

COVID-19 product group’s preliminary sales however declined 17% at CER to $159.7 million on lower sales across all regions and product categories. This has been the result of reduced demand for testing due to the rapid uptake of COVID-19 vaccination campaigns.

Product group wise, Diagnostic solutions, PCR/Nucleic acid amplification and Genomics/ NGS preliminary sales improved 71%, 8% and 110%,respectively all at CER. Sample technologies preliminary sales however registered a 3% decline at CER.

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As per the preliminary release, adjusted earnings per share (EPS) for the second quarter of 2021 are now expected in the range of 65-66 cents at CER, an improvement from the earlierprojection of 62-64 cents at CER. This also implies an increase of about 21% from 55 cents in the second quarter of 2020. The Zacks Consensus Estimate for Q2 is pegged at $62 cents.

Prelim 1H21 Figures

For the first half of 2021, preliminary non-COVID product group sales grew 37% (up 33% CER) to $771.6 million and represented 68% of total sales. COVID-19 product group’s preliminary sales for the first half were $363 million, a 38% year-over-year rise at CER.

For the first half of 2021, adjusted EPS is expected to be about $1.32-$1.33 ($1.30-$1.31 at CER) compared with 89 centsin the year-agoperiod.

Q3 View

For the third quarter, the company expects to report net sales of $483.8 million at CER. Adjusted EPS is expected to be about 52-53 cents at CER compared with 58 cents in the year-ago quarter. The Zacks Consensus Estimate for adjusted EPS is 57 cents on $561.2 million of revenues.

Full-Year Outlook Updated

Full-year net sales are now expected to grow at least 12% at CER (a significant decline from earlier outlook of CER growth of 18-20%). The Zacks Consensus Estimate of $2.27 billion implies 21.6% improvement from 2020. Adjusted EPS for 2021 is now expected to be minimum $2.42 at CER (prior outlook of about $2.42-2.46 at CER). The Zacks Consensus Estimate is pegged at $2.23.

ConsideringtheJun 30, 2021 exchange rate, currency movements against the U.S. dollar are still expected to create a positive impact of about 2-3 percentage points on net sales growth at actual rates for full-year 2021. Further 2-3 cents of positive impact are expected on adjusted EPS.

Share Price Performance

The stock has outperformed its industry over the past year. It has grown 5.2% against the industry’s 5.9% dip.

Zacks Rank and Key Picks

Currently, QIAGEN carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks from the Medical-Products industry include PetIQ, Inc. PETQ, National Vision Holdings, Inc. EYE and Envista Holdings Corporation NVST.

PetIQ, currently sporting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 25.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

National Vision Holdings, which carries a Zacks Rank #1, has a long-term earnings growth rate of 23.00%.

Envista Holdings, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 26.40%.

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