Philips Teams Up With HomeLab To Improve Indoor Air Quality

Koninklijke Philips N.V. (NYSE:PHG) recently announced that it has partnered with HomeLab to create a healthy home environment. The partnership will leverage Philips Air Purifier tool along with professional grade AeraSense technology to automatically monitor, react, as well as purify indoor air, capturing 99.97% of particles. In fact, incorporating Philips Air Purifier into HomeLab’s Healthy Home Program will make it easier to track and control air quality in home, facilitating healthier homes.

Combining HEPA and VOC purifier with a professional grade PM2.5 monitor, the Philips 2000i Smart Air Purifier tracks pollution trends as well as decrease allergens simultaneously. The active carbon filter aids in trapping toxic gases (VOCs), while the HEPA filter traps minute particles as small as 0.3 microns, including dust mites, pet dander, pollen and mold.

Philips Air Purifier’s unique numerical index, connected app and corresponding color ring, alerts users even if there is a minor change in indoor air conditions, supporting HomeLab’s analysis. The collaboration will enable users to visualize allergen levels with the color coded ring and watch air improvement simultaneously as the purifier is set to work. It will also allow users to control the device from smart phones as well as view both indoor as well as outdoor pollution.

Our Take

In the past couple of years, Philips has successfully morphed from a lighting company into a healthcare technology provider. However, the company’s near-term profitability is likely to be hurt by sluggish growth prospects of the healthcare market on a global scale. In light of uncertainties like slowing government spending and events surrounding the Affordable Care Act (“ACA”) legislation, the company expects the United States to witness low-single digit growth in the healthcare industry.

Moreover, country-specific risks for China like anti-corruption initiatives, slow GDP growth and centralized tendering are likely to dampen the prospects of the healthcare industry, thwarting growth. Also, in the HealthTech Other vertical, the company anticipates incurring approximately EUR 80 million of net cost, higher than previous guidance. These costs are likely to negatively impact margins in the quarters ahead. Not surprisingly, the Zacks Rank #4 (Sell) company has returned 6.1% in the last six months, underperforming the industry’s growth of 9%.

Stocks to Consider

Some better-ranked stocks from the same space include Analog Devices, Inc. (NASDAQ:ADI) , Amphenol Corporation (NYSE:APH) and Apptio Inc. (NASDAQ:APTI) . While Analog Devices sports a Zacks Rank #1 (Strong Buy), Amphenol and Apptio carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices has outpaced estimates in the preceding four quarters, with an average earnings surprise of 16.3%.

Amphenol has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 8.9%.

Apptio has surpassed estimates in the preceding four quarters, with an average positive earnings surprise of 47.6%.

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