PerkinElmer Hits 52-Week High: What's Driving The Stock?

On Jan 18, 2018, PerkinElmer Inc.’s (NYSE:PKI) shares hit a new 52-week high of $79.89, closing the session nominally lower at $79.54. On the same day, the company issued dividends of 7 cents to shareholders.

The company’s shares have returned 52.6% over the last year, higher than the S&P 500 index’s gain of 24.2%. Also, shares have outperformed the industry's rally of 49.1%. The stock has a market cap of $7.81 billion.

Considering this, one may expect PerkinElmer to scale new highs in the upcoming quarters. Further, the company has an impressive long-term earnings growth rate of 12.62%, which looks encouraging. Projected sales growth is 5.9% for the first quarter of 2018.

5 Factors Driving PerkinElmer

Let’s find out what are the four possible growth propellers.

QSight Triple Quad LC/MS/MS to Drive Growth: PerkinElmer delivers a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way. The company launched its new mass spectrometry platform, QSight Triple Quad LC/MS/MS, for the clinical market in the third quarter and received a very positive response from customers.

Notably, QSight was also registered as a Class 1 instrument with the FDA. Further, the instrument’s CE marking for the European market has also been accomplished, enabling it to be used in clinical applications, beyond newborn screening.

The company’s other products include the industry leading ChemDraw software, Electronic Lab Notebooks including cloud-based Elements SaaS Offering and enterprise E-Notebook Solutions along with the TIBCO Spotfire platform for scientific data analytics. PerkinElmer’s expanding portfolio is helping the company win market share worldwide.

Acquisitions: Recently, the company completed the previously announced acquisition of EUROIMMUN Medical Laboratory Diagnostics AG, for $1.3 billion in cash. The buyout is expected to extend PerkinElmer’s reach in the autoimmune and allergy diagnostic markets. The acquisition is likely to enable the company cure new infectious diseases. Management is optimistic about the acquisition to drive the company’s growth in fiscal 2018.

Notably, the acquisition of Tulip Diagnostics in the recent past has been beneficial for the company’s revenue growth.

Robust Fundamental Growth: In the last 9 years, the company has been witnessing high revenue growth, multiplying at a CAGR of 3.1%. Adjusted earnings per share witnessed a CAGR of 8.2%.

PerkinElmer’s Zacks Consensus Estimate for fourth-quarter earnings is pegged at 94 cents, up 13.3% year over year. The Zacks Consensus Estimate for revenues is pegged at $615.8 million, up 8.7% on a year-over-year basis.

Meanwhile, the company also delivered a positive earnings surprise of 1.39% in the last quarter.

Solid Organic Growth: Dampening the continuing headwinds in its radionucleotide business, PerkinElmer continues to experience favorable market trends. For the first time in more than five years, PerkinElmer witnessed positive organic growth in every region of the world in the third quarter. Looking specifically at the end markets, pharma biotech and diagnostics are expected to see strong sales in the quarters ahead.

Guidance Raised: Earlier, management confirmed that the company has been advancing favorably per the original guidance cited in the beginning of fiscal 2017. In this regard, the company raised its adjusted earnings per share guidance to the band of $2.80-$2.90, compared with the previous range of $2.75-$2.85. This reflects that the company is upbeat about delivering positive financial results in the quarters to come.

Stocks Worth a Look

PerkinElmer carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader medical space are BIOVERATIV Inc. (NASDAQ:BIVV) , Centene Corporation (NYSE:CNC) and Molina Healthcare Inc. (NYSE:MOH) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.

BIOVERATIV has an impressive expected growth rate of 27.9% for the first quarter of 2018. The stock has gained 39.5% over the last year, above the industry’s gain.

Centene has a projected long-term growth rate of 14%. In the last six months, the stock has rallied an impressive 30%, surpassing the industry’s rally of 23.4%.

Molina Healthcare expects a long-term growth rate of 24.5%. Over the last six months, the stock has gained 30.1%, performing above the industry.

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