The adoption of advanced technologies is driving growth in the medical diagnostics market. In the upcoming years, innovations in the field of digital in-vitro diagnostics and digital health applications for quick point-of-care diagnostics are boosting the industry.
The global medical diagnostics market is projected to grow at a CAGR of 6% from 2023 to 2027, reaching a value of $74.58 billion.
Amid this backdrop, it could be wise to buy fundamentally strong medical diagnostics stocks Agilent Technologies, Inc. (A), Mettler-Toledo International Inc. (MTD), and Harvard Bioscience, Inc. (HBIO).
The COVID-19 pandemic led to a surge in lab testing and increased demand for test kits. This, coupled with government funding and a rising number of patients, drove exponential market growth. Additionally, the demand for clinical diagnostics is expected to remain steady post-pandemic.
The diagnostics market is expected to grow due to the rising incidence of infectious and chronic diseases and the increased adoption of automated platforms. The clinical diagnostics market is estimated to grow at a CAGR of 6.1% over the coming five years.
In addition, more product launches for lipid panel tests are anticipated to fuel segment expansion. Market expansion is expected to be fueled by rising funding initiatives to support clinical diagnostics. The global diagnostic testing market is expected to reach $348.75 billion by 2030, growing at a CAGR of 8.6%.
Considering these factors, it could be wise to buy the featured stocks. Let’s take a closer look at their fundamentals.
Agilent Technologies, Inc. (A)
A provides application-focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide.
On June 08, 2023, A released the Agilent BioTek 406 FX washer dispenser, a compact instrument with multifunctional reagent dispensing and plate-washing capabilities. The BioTek 406 FX is designed for both integration into automated systems and standalone benchtop use, offering expanded liquid handling features. BioTek microplate washer dispensers are widely used in the life sciences industry.
On June 05, 2023, A announced two new liquid chromatography mass spectrometry systems (LCMS), the Agilent 6495D LC/TQ and the Agilent Revident LC/Q-TOF. They are accompanied by the Agilent MassHunter Explorer Profiling software and the Agilent ChemVista library manager software.
Both systems include intelligence features for efficient and robust research, providing fast, sensitive, and high-quality data. These new launches should boost its product portfolio.
In terms of the trailing-12-month EBITDA margin, A’s 29.25% is 728.3% higher than the 3.53% industry average. Likewise, the stock’s 0.66x trailing-12-month asset turnover ratio is 90.1% higher than the 0.35x industry average.
A’s net revenue for the second quarter ended April 30, 2023, increased 6.8% year-over-year to $1.72 billion. Its non-GAAP net income rose 10.9% year-over-year to $377 million. The company’s non-GAAP earnings per share increased 12.4% year-over-year to $1.27.
Moreover, Street expects A’s EPS for the quarter ending July 2023 to increase 2% year-over-year to $1.37. It surpassed the Street EPS estimates in each of the trailing four quarters. The stock has gained marginally intraday to close the last trading session at $117.54.
A’s POWR Ratings reflect strong prospects. It has an overall rating of B, which translates to a Buy in our proprietary system. The POWR ratings assess stocks by 118 different factors, each with its own weighting.
It is ranked #3 out of 51 stocks in the Medical – Diagnostics/Research industry. It has a B grade for Value and Quality. Click here to see A’s rating for Growth, Momentum, Sentiment, and Stability.
Mettler-Toledo International Inc. (MTD)
MTD manufactures and supplies precision instruments and services in the United States and internationally. It operates through five segments: U.S. Operations; Swiss Operations; Western European Operations; Chinese Operations; and Other.
In terms of the trailing-12-month EBITDA margin, MTD’s 31.34% is 787.7% higher than the 3.53% industry average. Likewise, its 1.17x asset turnover ratio is 235.1% higher than the 0.35x industry average.
MTD’s net earnings in the first quarter ended March 31, 2023, increased 8.3% year-over-year to $188.43 million. Its gross profit rose 5.2% year-over-year to $546.57 million. The company’s adjusted operating profit rose 10.4% year-over-year to $266.45 million. Also, its adjusted EPS increased 10.4% year-over-year to $8.69.
For the quarter ending June 30, 2023, MTD’s EPS and revenue is expected to increase 6.2% and 2.4% year-over-year to $9.98 and $1 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 20.1% to close the last trading session at $1,316.88.
MTD’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
It has an A grade for Quality. It is ranked #6 in the same industry. To see MTD’s ratings for Growth, Value, Momentum, Stability, and Sentiment, click here.
Harvard Bioscience, Inc. (HBIO)
HBIO develops, manufactures, and sells technologies, products, and services for life science applications in the United States and internationally. The company offers cellular and molecular technology products, other equipment for molecular-level testing and research, and in vitro systems for extracellular recording.
In terms of the trailing-12-month EBITDA margin, HBIO’s 4.82% is 36.7% higher than the 3.53% industry average. Likewise, its 0.75x asset turnover ratio is 116.5% higher than the 0.35x industry average.
For the fiscal first quarter ended March 31, 2023, HBIO’s revenues increased 4.2% year-over-year to $30 million. Its adjusted operating income rose 83.3% year-over-year quarter to $4.40 million. The company’s adjusted EBITDA increased 77.8% year-over-year to $4.80 million. In addition, its adjusted EPS came in at $0.06, representing an increase of 50% year-over-year.
HBIO’s EPS is expected to come in at $0.25 for the ongoing fiscal year ending December 2023, indicating a substantial increase year-over-year. Moreover, its revenue is expected to grow 6.4% year-over-year to $120.60 million for the same period.
Over the past six months, the stock has gained 119.2% to close the last trading session at $5.59.
HBIO’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has an A grade for Sentiment and a B grade for Value. Within the Medical – Diagnostics/Research industry, it is ranked #4. To see HBIO’s rating for Growth, Momentum, Stability, and Quality, click here.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
A shares were trading at $118.95 per share on Friday morning, up $0.90 (+0.76%). Year-to-date, A has declined -20.39%, versus a 16.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...
More Resources for the Stocks in this Article
| Ticker | POWR Rating | Industry Rank | Rank in Industry |
| A | Get Rating | Get Rating | Get Rating |
| MTD | Get Rating | Get Rating | Get Rating |
| HBIO | Get Rating | Get Rating | Get Rating |
