We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Thermo Fisher (TMO) Rides on Strong End Markets, New Launches
Read MoreHide Full Article
Thermo Fisher (TMO - Free Report) is expanding its inorganic growth profile strategically. The company’s strong focus on emerging markets is also encouraging. The stock carries a Zacks Rank #2 (Buy).
Thermo Fisher has outperformed its industry in the past year. The stock has lost 14.4% compared to the industry’s 21.6% fall.
The company exited the fourth quarter with better-than-expected results. The robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appear promising. During the fourth quarter, the company opened a new bioanalytical lab in Richmond, VA, to support its clinical research business and the increasing demand for analytical services to accelerate drug development.
Moreover, the company continued to successfully execute its capital deployment strategy in 2022. The integration of PPD is largely complete and drove strong returns to the shareholders with outstanding execution and business performance throughout the year.
In fourth-quarter 2022, Thermo Fisher witnessed strength in three out of its four end markets, categorized either by customer type or geography. Within the pharma and biotech end markets, the company grew in the low teens on growth across all businesses serving these customers, highlighted by the bioproduction and pharma services businesses.
In academics and government, Thermo Fisher grew in the mid-single digits, with strong growth across a range of its businesses, including biosciences, electron microscopy, chromatography and mass spectrometry, as well as in the restructured safety market channel. Within industrial and applied, the company grew in the low teens during the quarter on broad-based growth in all of its analytical instrument businesses, including electron microscopy, chromatography and mass spectrometry.
Thermo Fisher’s Gibco Cell Culture for Bioprocessing, Chromatography and Protein Purification is already in high demand. The company has also made a series of developments to augment Bioprocessing growth. In this regard, it launched the Gibco CTS DynaCellect Magnetic Separation System. The solutions are helping customers advance their cell and gene therapy programs.
On the flip side, a decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing.
Thermo Fisher’s diagnostics and healthcare end-market revenues in Q4 declined by approximately 40%. Revenues in the Life Sciences Solutions segment declined 26.6% year over year.
Moreover, in terms of international business, revenues within Europe declined in the low teens, Asia Pacific in the mid-single digits, China declined in the mid-single digits, and the rest of the world declined by high single digits.
The contraction of both margins on escalating costs and expenses does not bode well either. The gross margin of 41.4% in the fourth quarter contracted 910 basis points (bps) year over year on a 26.7% rise in the cost of revenues. The adjusted operating margin for the quarter came in at 16.7%, reflecting a contraction of 741 bps.
Other Key Picks
Some other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 5.4% against the industry’s 19.6% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 48.7% against the industry’s 0.8% decline over the past year.
Merit Medical, flaunting a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 28.1% against the industry’s 0.8% decline over the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Thermo Fisher (TMO) Rides on Strong End Markets, New Launches
Thermo Fisher (TMO - Free Report) is expanding its inorganic growth profile strategically. The company’s strong focus on emerging markets is also encouraging. The stock carries a Zacks Rank #2 (Buy).
Thermo Fisher has outperformed its industry in the past year. The stock has lost 14.4% compared to the industry’s 21.6% fall.
The company exited the fourth quarter with better-than-expected results. The robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appear promising. During the fourth quarter, the company opened a new bioanalytical lab in Richmond, VA, to support its clinical research business and the increasing demand for analytical services to accelerate drug development.
Moreover, the company continued to successfully execute its capital deployment strategy in 2022. The integration of PPD is largely complete and drove strong returns to the shareholders with outstanding execution and business performance throughout the year.
In fourth-quarter 2022, Thermo Fisher witnessed strength in three out of its four end markets, categorized either by customer type or geography. Within the pharma and biotech end markets, the company grew in the low teens on growth across all businesses serving these customers, highlighted by the bioproduction and pharma services businesses.
In academics and government, Thermo Fisher grew in the mid-single digits, with strong growth across a range of its businesses, including biosciences, electron microscopy, chromatography and mass spectrometry, as well as in the restructured safety market channel. Within industrial and applied, the company grew in the low teens during the quarter on broad-based growth in all of its analytical instrument businesses, including electron microscopy, chromatography and mass spectrometry.
Thermo Fisher’s Gibco Cell Culture for Bioprocessing, Chromatography and Protein Purification is already in high demand. The company has also made a series of developments to augment Bioprocessing growth. In this regard, it launched the Gibco CTS DynaCellect Magnetic Separation System. The solutions are helping customers advance their cell and gene therapy programs.
Thermo Fisher Scientific Inc. Price
Thermo Fisher Scientific Inc. price | Thermo Fisher Scientific Inc. Quote
On the flip side, a decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing.
Thermo Fisher’s diagnostics and healthcare end-market revenues in Q4 declined by approximately 40%. Revenues in the Life Sciences Solutions segment declined 26.6% year over year.
Moreover, in terms of international business, revenues within Europe declined in the low teens, Asia Pacific in the mid-single digits, China declined in the mid-single digits, and the rest of the world declined by high single digits.
The contraction of both margins on escalating costs and expenses does not bode well either. The gross margin of 41.4% in the fourth quarter contracted 910 basis points (bps) year over year on a 26.7% rise in the cost of revenues. The adjusted operating margin for the quarter came in at 16.7%, reflecting a contraction of 741 bps.
Other Key Picks
Some other top-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 5.4% against the industry’s 19.6% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 48.7% against the industry’s 0.8% decline over the past year.
Merit Medical, flaunting a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 28.1% against the industry’s 0.8% decline over the past year.