QIAGEN's QGEN business is expected to get a boost from its growing molecular diagnostic market, expanded test menu and growth-driving strategic collaborations. Yet, the company faces a challenging macro environment. An intense competitive environment and exchange rate fluctuations may dent the results of operations. The stock carries a Zacks Rank #3 (Hold) at present.

Factors Driving QGEN Stock

Molecular testing is the most dynamic segment of the global in vitro diagnostics market. QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare. The range of assays for diseases and biomarkers speeds up and simplifies laboratory workflow and standardizes many lab procedures.

QGEN has more than 30 master collaboration agreements with pharmaceutical industry customers, some with multiple co-development projects. In the third quarter of 2024, sales in the Diagnostic Solutions product group grew 10% compared with the year-ago period, driven by solid gains in consumables sales. The QuantiFERON test delivered its sixth consecutive quarter of sales above $100 million, supported by solid demand from conversion gains against the tuberculin skin test in all regions.

To support internal growth, QIAGEN heavily invests in research and development (R&D) for the menu expansion of its key platforms. R&D expenditures represented 8.9% of the third-quarter sales, anticipating a further rise in the coming months as the company pursues regulatory approvals of certain assays or instruments. QIAGEN marked several important product launches and key milestones, positioning it well to meet its 2028 goals. Particularly, QIAstat drove 40% CER sales growth from increasing demand worldwide and more than 150 placements of instruments.

In September, the QIAstat-Dx syndromic testing systems and associated assays received CE-marking under the European Union's new In-Vitro Diagnostic Medical Devices Regulation. Building on the success in syndromic testing, QIAGEN is also expanding the ecosystem for QIAstat into precision medicine, signing a number of pharma collaborations to use this technology in precision medicine applications.

QIAGEN N.V. Price

QIAGEN N.V. price | QIAGEN N.V. Quote

QIAGEN’s long-term business strategy involves entering into strategic alliances and marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of certain of their existing and potential products. In September 2024, the company announced a collaboration with Eli Lilly and Company to support the development of a QIAstat-Dx in-vitro diagnostic to detect APOE genotypes, which can play a key role in Alzheimer’s disease diagnosis.

The company also extended its strategic partnership with Bio-Manguinhos/Fiocruz to enhance malaria and dengue detection in Brazil’s national screening programs. Another agreement expands its collaboration with AstraZeneca beyond oncology to develop and commercialize CDx in chronic diseases.

Year to date, shares of QGEN have lost 5.5% compared with the industry’s 10.3% decline. The company continues to benefit from favorable molecular diagnostics industry dynamics. With its consistent focus on expansion through strategic collaborations and research and development, we expect the stock to gain momentum in the coming days.

Factors Impeding QGEN's Growth

QIAGEN currently markets products in more than 100 countries. Its international operations are subject to a variety of risks arising from the economy, political outlook, language and cultural barriers in the countries it operates. In many of these emerging markets, QIAGEN faces several risks, which include economies that may be dependent on only a few products and are therefore subject to significant fluctuations, weak legal systems that may affect its ability to enforce contractual rights, exchange controls, unstable governments, and privatization or other government actions affecting the flow of goods and currency.

In the quarter under review, sales in the Asia Pacific, Japan and the Rest of World region declined 2% year over year, reflecting challenging macro demand trends in China.

Recording more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may drag the top and the bottom line further in the future. For instance, foreign currency transactions in the third quarter of 2024 resulted in net losses of $1.1 million. The company continues to expect currency movements against the U.S. dollar to have a negative impact on full-year net sales of about 1% point and an adverse effect of about 2 cents per share on adjusted EPS results.

Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company is facing increasing competition from firms that provide competitive pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price-sensitive. Other product suppliers may have significant advantages in terms of financial, operational, sales, and marketing resources, as well as experience in research and development.

Key Picks

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north by 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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