The healthcare sector thrived during the pandemic and is poised to remain robust, given the soaring healthcare awareness among individuals and technological advancements. The global healthcare services market is expected to reach $21.06 trillion by 2030, growing at a CAGR of 8.3%.
Given this backdrop, let us probe into the healthcare growth stock Bruker Corporation (BRKR), whose impressive growth prospects could make it a wise portfolio addition now.
BRKR develops, manufactures, and distributes scientific instruments, and analytical and diagnostic solutions in the United States and internationally. The company operates through four segments: Bruker Scientific Instruments (BSI) BioSpin, BSI CALID, BSI NANO, and Bruker Energy & Supercon Technologies.
The company reported considerable growth in its top and bottom line in the first quarter of 2023. In addition, BRKR’s board of directors approved a new share repurchase authorization for the purchase of up to $500 million of the Company’s common stock over a two-year period commencing May 15, 2023.
Moreover, the recent acquisition of ZONTAL Inc. would enable the integration of digital laboratory and process data management, a combination of vendor-agnostic data storage and analysis, and workflow tools to help scientists realize the full potential of their analytical laboratory and process digital assets. This should strengthen Bruker BioSpin’s Integrated Data Solutions (IDS) software division.
The stock has gained 23.4% over the past year and 7.6% over the past six months to close the last trading session at $73.49. Wall Street analysts expect the stock to reach $86 in the upcoming 12 months, indicating a potential upside of 17%.
Here are the factors that could influence BRKR’s performance in the upcoming months:
For its fiscal first quarter that ended March 31, 2023, BRKR’s revenue increased 15.2% year-over-year to $685.30 million. The company’s non-GAAP gross profit came in at $365.90 million, up 16.8% from the prior-year quarter. Its non-GAAP operating income was reported at $139.40 million, representing a 20.4% year-over-year improvement.
Non-GAAP net income attributable to BRKR came in at $95.10 million, up 27.5% from the prior-year period. Its non-GAAP earnings per share increased 30.6% year-over-year to $0.64.
Solid Growth Record
BRKR’s revenue has grown at 8.8% and 7.7% CAGRs over the past three and five years, respectively. Moreover, its EBIT and net income have grown at 19% and 20.8% CAGRs over the past three years, respectively.
BRKR’s trailing-12-month EBITDA margin of 21.93% is 902.9% higher than the industry average of 2.19%. Likewise, its trailing 12-month ROCE and ROTC of 28.12% and 12.81% compare to the industry averages of negative 43.57% and 23.35%, respectively.
The company announced the approval of the payment of a quarterly dividend of $0.05 per share, payable to the stockholders on June 16, 2023. BRKR pays a dividend of $0.20 per share annually.
This translates to a 0.27% yield on the current price level. Its dividends have grown at 7.7% and 4.6% CAGRs over the past three and five years, respectively. Its four-year average dividend yield is 0.30%.
Favorable Analyst Estimates
The consensus EPS estimate of $0.49 for the current quarter (ending June 2023) and $2.58 for the current year (ending December 2023) indicate 9.8% and 10.3% year-over-year increases, respectively.
Likewise, the consensus revenue estimates for the same periods of $649.16 million and $2.86 billion reflect improvements of 10.3% and 13% year-over-year. Moreover, BRKR topped consensus revenue estimates in three of the trailing four quarters, which is impressive.
POWR Ratings Reflect Promising Outlook
It is no surprise that BRKR has an overall A rating, equating to a Strong Buy in our POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. BRKR has a grade A for Growth, in sync with its robust financials and solid past growth.
In addition, the stock is rated a B grade for Quality, consistent with its strong profitability. It is also rated B for Sentiment, justified by its optimistic analyst estimates.
BRKR ranks first in the 54-stock Medical – Diagnostics/Research industry.
Beyond what we have mentioned above, to see the additional POWR Ratings for Value, Momentum, and Stability for BRKR, click here.
BRKR has updated its outlook on the backs of its robust quarterly results. For the fiscal year 2023, BRKR increased its revenue guidance to a range of $2.83 billion to $2.88 billion, up from the prior outlook of $2.81 billion to $2.86 billion. Also, its non-GAAP EPS is expected to be between $2.55 and $2.60, or up 9% and 11% year-over-year.
Moreover, BRKR’s strong financial performance, outlook, and dividend payouts, should continue to support its flexible capital allocation strategy and maximize shareholder value creation over the long term.
Therefore, this growth stock could be a wise portfolio addition now to ensure stable returns.
How Does Bruker Corporation (BRKR) Stack Up Against Its Peers?
While BRKR has been rated A, equating to a Strong Buy, one can check out these other stocks within the Medical – Diagnostics/Research industry: Semler Scientific Inc. (SMLR) and Global Cord Blood Corporation (CO), which have an A (Strong Buy) rating, and Harvard Bioscience, Inc. (HBIO) which has a B (Buy) rating.
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BRKR shares were trading at $73.46 per share on Wednesday morning, down $0.03 (-0.04%). Year-to-date, BRKR has gained 7.55%, versus a 8.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Sristi Suman Jayaswal
The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors. More...
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