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

It’s been a month since Qiagen’s (QGEN) last earnings report. Shares rose about 1.6% in that time, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qiagen facing a pullback? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the company’s most recent earnings report in order to get a better handle on the important factors influencing the situation.

QIAGEN’s top earnings and revenues in the first quarter, margins are growing

QIAGEN NV’s first quarter 2024 adjusted earnings per share were 46 cents and 47 cents at constant exchange rates (CER), representing a decline of 9.8% year-over-year. However, this number beat the Zacks Consensus Estimate by 4.6%.

The adjustment excludes the impact of some one-off items, such as: business integration, acquisition and restructuring expenses, amortization costs for purchased intangible assets and non-cash interest costs.

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

Revenues in detail

Quarterly net sales decreased 5.5% year-over-year to $458.8 million (down 5% for CER). The top line surpassed the Zacks Consensus Estimate by 0.7%. Sales at CER were $462 million, topping forecasts of at least $455 million.

Geographic revenue analysis

Sale from America (50.9% of sales) was $234 million, down 5% year-over-year and at CER.

Revenue from Europe, Middle East and Africa (33.3%) decreased 2% on a reported basis and with CER to $155 million. Sales in non-COVID product groups dropped to low single-digit CER.

Revenue from Asia Pacific/Japan (15.7%) decreased 13% year-over-year (down 9% for CER) to $72 million.

Segment details

As of Q1 2024, QIAGEN had two main classes of customers – Molecular diagnostics AND Life Sciences.

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

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

Operational update

Adjusted gross profit (excluding amortization of acquisition-related intangible assets) decreased 5.1% year-over-year to $307.1 million.

Meanwhile, adjusted gross margin increased 28 basis points (bps) to 66.9% in the first quarter, with cost of sales (excluding depreciation and amortization) decreasing 6.3% to $151.7 million.

Sales and marketing expenses decreased 3.1% year-over-year to $111.1 million. Research and development expenses of $51.3 million decreased 6.2% year-over-year. General and administrative expenses decreased 16.3% year over year to $27.6 million. Adjusted operating income (excluding items such as acquisition-related intangible asset amortization, restructuring, integration and other) declined 3.4% year-over-year to $117 million. Meanwhile, adjusted operating margin increased 54 bps to 25.5%.

Financial update

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

Cumulative net cash from operations at the end of the first quarter of 2024 was $133.1 million, compared to $71.9 million in the same period a year ago.

Conductivity

QIAGEN confirmed its financial outlook for 2024.

Full-year net sales at CER are expected to be nearly $2.0 billion. Consumables and related revenues are expected to drive growth, while larger scale instrument sales remain a challenge. The Zacks Consensus Estimate has revenues of $2.00 billion.

Adjusted earnings per share are expected to be at least $2.10, according to CER. The Zacks Consensus Estimate is pegged at $2.09.

The company also provided guidance for the second quarter of 2024. QGEN estimates net sales at CER to be at least $495 million. The Zacks Consensus Estimate is $494.9 million.

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

How have estimates changed since then?

Last month, investors saw a downward trend in new estimates.

VGM results

Qiagen currently has a weak Growth Score of D, but its Momentum Score is doing much better at B. Plotting a somewhat similar path, the stock is rated C on the value side, sitting in the middle 20% for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company generally show a downward trend, and the scale of these adjustments was net zero. Notably, Qiagen carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Qiagen belongs to the Zacks Medical – Biomedical & Genetics industry. Another company in the same industry, Biogen Inc. (BIIB), has gained 1.8% over the past month. More than a month has passed since the company announced its results for the quarter ended March 2024.

In the most recent quarter, Biogen reported revenue of $2.29 billion, representing a -7% year-over-year change. EPS of $3.67 in the same period compared to $3.40 a year ago.

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

The overall direction and magnitude of estimate revisions translates into a Zacks Rank #3 (Hold) for Biogen. The stock also has a VGM Rating of B.

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