Lexington, Mass.-based healthcare technology provider iSpecimen Inc.’s (ISPC) revenue grew 20.8% year-over-year to $2.72 million in its fiscal third quarter ended September 30, 2021. However, the company’s total operating expenses came in at $4.18 million, up 40.5% year-over-year. Its loss from operations was $1.46 million, compared to $723,079 in the year-ago period. Furthermore, ISPC’s 50.64% trailing-12-month gross profit margin is 7.7% lower than the 54.64% industry average. In addition, its trailing-12-month CAPEX/Sales ratio is 99.6% lower than the 3.93% industry average. Also, in terms of forward EV/S ratio, its 10.00x is 66.1% higher than the 6.02x industry average. In addition, its forward P/S is 46% higher than the 7.23x industry average. So, we think it is wise to avoid the stock now.
The diagnostic & research industry is expected to witness an uptrend. Dr. Anthony Fauci recently said that the United States has “the potential to go into a fifth wave” of coronavirus infections amid rising cases and stagnating vaccination rates. This should benefit the diagnostics & research market in the near term. According to a PR Newswire report, the Medical Diagnostics Market is projected to grow by $61.56 billion from 2021 – 2025.
Therefore, we think investors that are looking to benefit from the diagnostics & research industry’s growth could invest in quality stocks Quest Diagnostics Incorporated (DGX), QIAGEN N.V. (QGEN), and Global Cord Blood Corporation (CO).
Quest Diagnostics Incorporated (DGX)
DGX provides diagnostic testing, information, and services in the USA and internationally. It also develops and delivers diagnostic information services, like routine testing, non-routine and advanced clinical testing, anatomic pathology testing & other diagnostic information services. DGX is headquartered in Madison, N.J.
On October 21, 2021, Steve Rusckowski, Chairman, CEO, and President, said, “We have raised our outlook for the remainder of the year based on higher than anticipated COVID-19 volumes as well as the continued progress we expect to see in our base business despite rising labor costs and inflationary pressures. The momentum of our base business positions us to deliver the 2022 outlook we shared at our March investor day.”
DGX’s goodwill increased 2.7% year-over-year to $7.06 billion for its fiscal third quarter, ended September 30, 2021. Its total current liabilities came in at $1.76 billion for the period ended September 30, 2021, compared to $1.78 billion for December 31, 2020. Moreover, its other liabilities came in at $801 million, compared to $847 million for the same period.
For its fiscal 2021, DGX’s revenue and EPS are expected to grow 12% and 23.4%, respectively, year-over-year to $10.57 billion and $13.8, respectively. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 24.6% in price to close the last trading session at $154.95.
DGX has an overall B rating which represents a Buy in our POWR Ratings system. It has a B grade for Value and Quality. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
QIAGEN N.V. (QGEN)
Headquartered in Venlo, the Netherlands, QGEN provides a sample to insight solutions that transform biological materials into molecular insights worldwide. It also offers primary sample technology consumables, such as nucleic stabilization and purification kits.
On November 9, 2021, QGEN announced the addition of StableScript to the OEM portfolio. Dr. Kay Koerner, Vice President, Head of OEM at QIAGEN, said, “This new StableScript addition to our OEM portfolio addresses key challenges many customers face and can also help overcome supply chain issues smaller biotechnology companies or laboratories can experience during rapid growth.”
QGEN’s net sales increased 10.5% year-over-year to $534.75 million in the third quarter, ended September 30, 2021. Its gross profit came in at $337.22 million, up 5.1% year-over-year. Its net income came in at $133.14 million, up 687.3% year-over-year.
Analysts expect QGEN’s EPS to grow 10.2% per annum over the next five years. Over the past six months, the stock has gained 14.5% in price to close the last trading session at $56.47.
QGEN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
QGEN has a B grade for Value, Stability, and Quality. It is ranked #8 in the same industry. Click here to see the additional POWR Ratings for Growth, Momentum, and Sentiment for QGEN.
Global Cord Blood Corporation (CO)
Based in Hong Kong, CO and its subsidiaries provide umbilical cord blood storage and ancillary services. The company operates three cord blood banks in the Beijing municipality, the Guangdong province, and the Zhejiang province.
On November 24, 2021, Ms. Ting Zheng, Chairperson and CEO of CO, said, “As we continue to monitor relevant regulations and carry on with our organic growth efforts, we have directed ample resources to analyze business development opportunities in-depth to foster the long-term growth of the Company.”
CO’s revenues increased 9.8% year-over-year to $48.68 million in its fiscal 2022 second quarter, ended September 30, 2021. Its gross profit came in at $41.51 million, up 11% year-over-year. And its operating income increased 15.3% year-over-year to $24.90 million.
Over the past year, the stock has gained 8.6% in price to close the last trading session at $4.15.
CO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.
CO has an A grade for Quality, and a B grade for Value, Stability, and Sentiment. Within the Medical – Diagnostics/Research industry, it is ranked #3. Click here to see the additional POWR Rating for Growth and Momentum for CO.
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DGX shares were unchanged in after-hours trading Monday. Year-to-date, DGX has gained 33.92%, versus a 25.48% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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