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Why Is QIAGEN (QGEN) Up 13.8% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for QIAGEN N.V. (QGEN - Free Report) . Shares have added about 13.8% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is QGEN due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Recent Earnings

QIAGEN’s first-quarter 2018 adjusted earnings per share (EPS) came in at 26 cents, up 18.2% year over year. The figure beat the Zacks Consensus Estimate of 24 cents. At constant exchange rate or CER, the company reported adjusted earnings of 25 cents.

Revenues in Detail

Net sales at actual rates in the first quarter grew 11.7% on a year-over-year basis to $343.6 million (6% at CER). Also, the top line surpassed the Zacks Consensus Estimate of $340 million.

Region-wise, sales from the Americas (46% of revenues) grew 11% at CER, while revenues from Europe-Middle East-Africa (34%) increased 4%. Further, revenues from Asia-Pacific/Japan (20%) rose 2% year over year, after excluding business portfolio changes. Sales in the top seven emerging markets (13%) exhibited growth of 1% year over year at CER in the quarter under review.

Segments in Detail

QIAGEN primarily generates revenues through Molecular Diagnostics, Applied Testing, Pharma and Academia, which represented 47%, 9%, 21% and 23% of net sales, respectively, during the reported quarter.

Molecular diagnostics sales were up 9% at CER. Sales derived from Applied Testing remained flat at CER. Pharma sales rose 8% at CER in the first quarter and Academia sales improved 3% on growing demand.

Operational Update

Adjusted operating income (excluding restructuring charges) increased 21% year over year to $77.2 million in the first quarter. Also, adjusted operating margin expanded 180 basis points to 22.5%. 

Financial Update

QIAGEN exited first quarter with cash and cash equivalents of $814.9 million, up from $657.7 million at the end of 2017. Net cash from operating activities in the reported quarter was $48.2 million, down from $60.2 million in the year-ago quarter. Moreover, the company reported first-quarter 2018 free cash flow of $29.3 million compared with $44.2 million in the year-ago quarter.

QIAGEN announced a new commitment in January to return $200 million to shareholders via open-market repurchases, after returning $300 million to shareholders by the end of 2017. Notably, shares will be repurchased on the Frankfurt Stock Exchange.

2018 Guidance

QIAGEN has maintained its 2018 guidance for total net sales growth at about 6-7% at CER. This guidance also includes decreased U.S. HPV test sales to have an adverse impact of around 1.5% on total net sales growth in 2018. Further, sales of about $7 million during the second half of 2018 from the acquisition of STAT-Dx was taken into account. The Zacks Consensus Estimate for 2018 revenues is pegged at $1.54 billion.

Moreover, the adjusted EPS guidance has been reiterated at $1.31-$1.33 at CER. Our consensus estimate for 2018 earnings of $1.34 is above the guided range.

Further, favorable currency movements are expected to have a positive impact on 2018 net sales growth of 2-3% and of a penny to two cents per share on adjusted EPS.

The company also provided the financial guidance for the second quarter of 2018. Net sales are expected to grow 5-6% at CER. Adjusted EPS is expected at around 31-32 cents at CER on an underlying basis. The Zacks Consensus Estimate for earnings stands at 32 cents per share, coinciding with the high end of the company’s guided range.

Further, favorable currency movements are expected to have a positive impact on the second-quarter 2018 net sales growth of 2-3% and up to a penny on adjusted EPS.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.

QIAGEN N.V. Price and Consensus

VGM Scores

At this time, QGEN has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of this revision looks promising. Notably, QGEN has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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