Cases of Monkeypox, a viral zoonosis, have been spreading exponentially, with more than 10,000 cases reported in the United States. The spread of the infection in more than 85 countries has prompted the WHO to declare it “a public health emergency of international concern.”
Though the severity of the infection is moderate, the disease has the potential of severe illness, with a total of five deaths recorded to date. Moreover, the soaring cases and high vaccine demand have led to shortages. Federal health officials are developing new strategies to combat the challenging situation.
This should bode well for Quest Diagnostics Incorporated (DGX) and SIGA Technologies, Inc. (SIGA), which are working actively on vaccine and testing developments. Thus, we think these stocks could be ideal additions to your watchlist now.
Quest Diagnostics Incorporated (DGX)
DGX provides diagnostic testing, information, and services in the United States and internationally.
On July 29, DGX announced the nationwide availability of a lab-developed molecular diagnostic test to aid in the diagnosis of infection with the monkeypox virus and its plans to launch the CDC’s orthopoxvirus test in the first half of August. This should help the company in conducting rapid tests across the country and should garner massive returns in the near term, given the rising cases.
DGX’s base business revenues increased 2.9% year-over-year to $2.10 billion in the fiscal quarter ended June 30, 2022. Net income attributable to DGX came in at $234 million, while its EPS stood at $1.96 in the same period.
Street expects DGX’s revenue for the fiscal quarter ending September 2022 to come in at $2.35 billion. Its EPS is expected to come in at $2.19 in the same period.
In terms of its forward P/E, DGX is currently trading at 16.54x, 40.6% lower than the industry average of 27.86x. Its forward Price/Sales multiple of 1.69 is 66.5% lower than the industry average of 5.06.
DGX beat the consensus EPS estimates in three of the trailing four quarters.
Over the past month, the stock has gained 2.6% to close the last trading session at $140.98.
DGX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
DGX is also rated B in Quality. Within the Medical – Diagnostics/Research industry, it is ranked #9 of 54 stocks. Click here to see additional POWR Ratings for Value, Momentum, Growth, Sentiment, and Stability for DGX.
SIGA Technologies, Inc. (SIGA)
SIGA, a commercial-stage pharmaceutical company, focuses on the health security and infectious disease markets in the United States.
Earlier this week, SIGA announced that the U.S. government is exercising the option to acquire $26 million of the company’s intravenous monkeypox treatment. The company intends to deliver these Tpoxx doses in 2023.
SIGA’s total revenues increased 92.6% year-over-year to $16.67 million in the fiscal quarter ended June 30, 2022. Operating income came in at $3.07 million, while its net income grew 1,103.9% from the year-ago value to $2.04 million.
Analysts expect SIGA’s revenue for the fiscal year ending December 2022 to come in at $125.03 million. Also, the company’s EPS is expected to reach $0.66 in the same period.
In terms of its trailing-12-month P/E, SIGA is currently trading at 23.56x, 14.4% lower than the industry average of 27.52x. Its trailing-12-month EV/EBIT multiple of 16.83 is 20.2% lower than the industry average of 21.09.
SIGA gained 259.5% over the past year to close the last trading session at $22.90. It gained 245.3% over the past six months.
SIGA’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our POWR Ratings system.
The company has an A grade in Quality and a B in Value and Growth. Out of the 403 stocks in the Biotech industry, SIGA is ranked #25. To get SIGA’s ratings for Momentum, Stability, and Sentiment, click here.
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DGX shares were trading at $140.57 per share on Thursday afternoon, down $0.41 (-0.29%). Year-to-date, DGX has declined -17.59%, versus a -10.92% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...
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