As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the research tools & consumables industry, including Waters Corporation (NYSE:WAT) and its peers.
The life sciences subsector specializing in research tools and consumables enables scientific discoveries across academia, biotechnology, and pharmaceuticals. These firms supply a wide range of essential laboratory products, ensuring a recurring revenue stream through repeat purchases and replenishment. Their business models benefit from strong customer loyalty, a diversified product portfolio, and exposure to both the research and clinical markets. However, challenges include high R&D investment to maintain technological leadership, pricing pressures from budget-conscious institutions, and vulnerability to fluctuations in research funding cycles. Looking ahead, this subsector stands to benefit from tailwinds such as growing demand for tools supporting emerging fields like synthetic biology and personalized medicine. There is also a rise in automation and AI-driven solutions in laboratories that could create new opportunities to sell tools and consumables. Nevertheless, headwinds exist. These companies tend to be at the mercy of supply chain disruptions and sensitivity to macroeconomic conditions that impact funding for research initiatives.
The 10 research tools & consumables stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.4% since the latest earnings results.
Waters Corporation (NYSE:WAT)
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE:WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Waters Corporation reported revenues of $872.7 million, up 6.5% year on year. This print exceeded analysts’ expectations by 1.9%. It was still a decent quarter for the company with an impressive beat of analysts’ organic revenue estimates but revenue guidance for next quarter meeting analysts’ expectations.
"We delivered excellent results in the fourth quarter, led by double-digit growth in Pharma, while instruments and recurring revenue both grew high single-digits in constant currency," said Dr. Udit Batra, President & CEO, Waters Corporation.
The stock is down 8% since reporting and currently trades at $373.
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ:TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Bio-Techne reported revenues of $297 million, up 9% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
Bio-Techne delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 15.4% since reporting. It currently trades at $61.48.
With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.
Avantor reported revenues of $1.69 billion, down 2.1% year on year, falling short of analysts’ expectations by 1.6%. It was a softer quarter as it posted a miss of analysts’ organic revenue estimates.
Avantor delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 23.1% since the results and currently trades at $16.67.
With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE:MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.
Mettler-Toledo reported revenues of $1.05 billion, up 11.8% year on year. This number surpassed analysts’ expectations by 3.6%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a narrow beat of analysts’ full-year EPS guidance estimates.
The stock is down 9.5% since reporting and currently trades at $1,224.
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE:DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Danaher reported revenues of $6.54 billion, up 2.1% year on year. This print beat analysts’ expectations by 1.6%. It was a strong quarter as it also produced a solid beat of analysts’ organic revenue estimates.
The stock is down 15% since reporting and currently trades at $210.65.
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