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Luminex Hits a New 52-Week High: What's Driving the Stock?
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On Mar 3, shares of Luminex Corporation reached a new 52-week high of $27.40, closing the session marginally lower at $27.22. In fact, the stock has rallied nearly 14.9% since its fourth-quarter earnings announcement on Feb 10.
Rising segmental revenues, solid product portfolio expansion and impressive full-year guidance prompted the rally.
Let us delve deeper into the growth propellers.
Luminex’s Q4 Earnings Snapshot
The company exited the fourth quarter on a promising note, with better-than-expected earnings and revenue numbers.System, Service and Other revenues also improved significantly. The acquisition of the flow cytometry asset of MilliporeSigma continues to positively impact the company’s performance.
Operating margin of 6.2% expanded 500 bps from the year-ago quarter.
The company reiterated 2020 revenue outlook of $352-$362 million. This upbeat guidance indicates that the bullish momentum will continue through the rest of the year.
Other Growth-Driving Factors
Robust Performance of Molecular Diagnostics Platform:In the fourth quarter, Luminex’s total sample-to-answer franchise revenues improved 15% from the prior-year quarter. Per management, the utilization rate per customer for VERIGENE products increased 12% in the quarter. As the company advances into 2020, sample-to-answer revenues are expected to rise around 25% from the previous year on the back of the launch of the VERIGENE II product (anticipated in mid-2020).
Collaborations: Last year, the company had signed an agreement with EDP Biotech Corporation, per which the latter will have the rights to develop, market and sell its blood-based colorectal cancer diagnostic assay, ColoPlex, utilizing the xMAP technology of the former. Luminex had also announced the signing of a new supply and distribution agreement with Bio-Techne Corp., which would be effective through 2020. These deals continue to buoy optimism on the stock.
Regulatory Approvals: Investors have been optimistic about the growth prospects of the company since it attained FDA 510(k) clearance for the ARIES MRSA Assay in October 2019. In February 2020, the company also submitted an application to the FDA, seeking a 510(k) clearance for the VERIGENE II Respiratory Flex Assay. The commercial launch of the assay is being anticipated for mid-2021.
Meanwhile, Luminex had a great run on the bourses in the past year. Over the past year, the stock has gained 8.9%, higher than the broader industry’s growth of 0.4%. The company currently has a market cap of $1.19 billion.
Zacks Rank & Stocks Worth a Look
Luminex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are ResMed Inc. (RMD - Free Report) , Medtronic plc (MDT - Free Report) and Hill-Rom Holdings, Inc. .
Medtronic’s long-term earnings growth rate is estimated at 7.4%. The company presently carries a Zacks Rank #2.
Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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Luminex Hits a New 52-Week High: What's Driving the Stock?
On Mar 3, shares of Luminex Corporation reached a new 52-week high of $27.40, closing the session marginally lower at $27.22. In fact, the stock has rallied nearly 14.9% since its fourth-quarter earnings announcement on Feb 10.
Rising segmental revenues, solid product portfolio expansion and impressive full-year guidance prompted the rally.
Let us delve deeper into the growth propellers.
Luminex’s Q4 Earnings Snapshot
The company exited the fourth quarter on a promising note, with better-than-expected earnings and revenue numbers.System, Service and Other revenues also improved significantly. The acquisition of the flow cytometry asset of MilliporeSigma continues to positively impact the company’s performance.
Operating margin of 6.2% expanded 500 bps from the year-ago quarter.
The company reiterated 2020 revenue outlook of $352-$362 million. This upbeat guidance indicates that the bullish momentum will continue through the rest of the year.
Other Growth-Driving Factors
Robust Performance of Molecular Diagnostics Platform:In the fourth quarter, Luminex’s total sample-to-answer franchise revenues improved 15% from the prior-year quarter. Per management, the utilization rate per customer for VERIGENE products increased 12% in the quarter. As the company advances into 2020, sample-to-answer revenues are expected to rise around 25% from the previous year on the back of the launch of the VERIGENE II product (anticipated in mid-2020).
Collaborations: Last year, the company had signed an agreement with EDP Biotech Corporation, per which the latter will have the rights to develop, market and sell its blood-based colorectal cancer diagnostic assay, ColoPlex, utilizing the xMAP technology of the former. Luminex had also announced the signing of a new supply and distribution agreement with Bio-Techne Corp., which would be effective through 2020. These deals continue to buoy optimism on the stock.
Regulatory Approvals: Investors have been optimistic about the growth prospects of the company since it attained FDA 510(k) clearance for the ARIES MRSA Assay in October 2019. In February 2020, the company also submitted an application to the FDA, seeking a 510(k) clearance for the VERIGENE II Respiratory Flex Assay. The commercial launch of the assay is being anticipated for mid-2021.
Meanwhile, Luminex had a great run on the bourses in the past year. Over the past year, the stock has gained 8.9%, higher than the broader industry’s growth of 0.4%. The company currently has a market cap of $1.19 billion.
Zacks Rank & Stocks Worth a Look
Luminex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are ResMed Inc. (RMD - Free Report) , Medtronic plc (MDT - Free Report) and Hill-Rom Holdings, Inc. .
ResMed has a projected long-term earnings growth rate of 12%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medtronic’s long-term earnings growth rate is estimated at 7.4%. The company presently carries a Zacks Rank #2.
Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>