Bruker Profits From NANO & CALID, New Buyout Holds Promise

On Dec 12, we issued an updated research report on Bruker Corporation (NASDAQ:BRKR) . The stock carries a Zacks Rank #2 (Buy).

The company’s Scientific Instruments segment has been performing well, driven by strong results from NANO and CALID groups. Improvement in gross and operating margins buoys optimism. In the last reported third-quarter 2018, Bruker NANO reported revenue growth in high-single digits at constant currency, propelled by solid performances in the industrial research and academic research markets.

The company witnessed robust demand for ADVANCE X-ray and nano-analysis products. This apart, recent acquisitions like JPK and Anasys (completed in July and April 2018, respectively) contributed to growth. Meanwhile, Semiconductor metrology revenues were modestly up on a year-over-year basis owing to underlying end market demand. Overall, the Nano Group saw a sturdy finish to the last reported quarter with higher demand from industrial markets, strong semiconductor sales and improved academic markets.

The CALID Group is also delivering well with impressive year-to-date revenues in high-single digits. Growth was driven by mass spectrometry and molecular spectroscopy businesses. The company is currently projecting the benefits of its life science mass spec portfolio transformation and expects further growth in 2019 and beyond as recently launched products like timsTOF Pro and the new scimaX MRMS ramp up its product menu.

Moving on, the company’s strategic acquisition activity has also been encouraging. In October 2018, Bruker announced its plan to buy 80% stake in Hain Diagnostics. Per the company, the Hain portfolio is highly complementary to Bruker's market-leading MALDI Biotyper solution.

On the flip side, Bruker conducts 80% of its business in the international markets. As a result, adverse currency fluctuations persist to incur losses for the company. Also, headwinds like unfavorable economic conditions and an intense competition continue to pose threats to the stock.

Over the past month, shares of Bruker have lost 1.5% against the industry’s rise of 2.3%.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Veeva Systems (NYSE:VEEV) , Integer Holdings Corp. (NYSE:ITGR) and Surmodics, Inc (NASDAQ:SRDX) .

Veeva Systems’ long-term earnings growth rate is estimated at 19.2%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Integer Holdings has an earnings growth rate of 30.3% for 2018 and a Zacks Rank #2 (Buy).

Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2.

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