Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Mettler-Toledo (NYSE:MTD) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 1.3% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Mettler-Toledo (NYSE:MTD)
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 $1.03 billion, up 7.9% year on year. This print exceeded analysts’ expectations by 3.2%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ revenue estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
Patrick Kaltenbach, President and Chief Executive Officer, stated, “Our third quarter results were strong and reflected very good growth, especially in Industrial. I am very pleased with our team’s strong execution as we leverage our Spinnaker sales and marketing program and innovative product portfolio to drive growth while delivering solid EPS.”
Mettler-Toledo achieved the biggest analyst estimates beat of the whole group. Still, the market seems discontent with the results. The stock is down 0% since reporting and currently trades at $1,370.
Read our full report on Mettler-Toledo here, it’s free for active Edge members.
Best Q3: Sotera Health Company (NASDAQ:SHC)
With a critical role in ensuring the safety of millions of patients worldwide, Sotera Health (NASDAQGS:SHC) provides sterilization services, lab testing, and advisory services to ensure medical devices, pharmaceuticals, and food products are safe for use.
Sotera Health Company reported revenues of $311.3 million, up 9.1% year on year, outperforming analysts’ expectations by 2.6%. The business had an exceptional quarter with a solid beat of analysts’ full-year EPS guidance estimates and a solid beat of analysts’ organic revenue estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $16.61.
Is now the time to buy Sotera Health Company? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Avantor (NYSE:AVTR)
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 $1.62 billion, down 5.3% year on year, falling short of analysts’ expectations by 1.4%. It was a softer quarter as it posted a slight miss of analysts’ revenue estimates and a miss of analysts’ organic revenue estimates.
Avantor delivered the slowest revenue growth in the group. As expected, the stock is down 28% since the results and currently trades at $10.85.
Read our full analysis of Avantor’s results here.
Agilent (NYSE:A)
Originally spun off from Hewlett-Packard in 1999 as its measurement and analytical division, Agilent Technologies (NYSE:A) provides analytical instruments, software, services, and consumables for laboratory workflows in life sciences, diagnostics, and applied chemical markets.
Agilent reported revenues of $1.86 billion, up 9.4% year on year. This number beat analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and a narrow beat of analysts’ revenue estimates.
Agilent achieved the fastest revenue growth among its peers. The stock is down 7.6% since reporting and currently trades at $142.17.
Read our full, actionable report on Agilent here, it’s free for active Edge members.
Revvity (NYSE:RVTY)
Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE:RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.
Revvity reported revenues of $698.9 million, up 2.1% year on year. This print was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced a decent beat of analysts’ full-year EPS guidance estimates but organic revenue in line with analysts’ estimates.
Revvity delivered the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $99.50.
Read our full, actionable report on Revvity here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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