QuidelOrtho Corp.’s stock lost about a third of its value Wednesday after the diagnostic-products manufacturer missed its fourth-quarter profit estimate, announced job cuts, and sustained at least one analyst downgrade.
San Diego-based QuidelOrtho
QDEL,
reported that its fourth quarter point-of-care revenues and molecular revenue both fell 42% due to COVID-19 headwinds, as the impact of the disease tapered off.
The company’s fourth-quarter earnings of $1.17 a share fell short of the FactSet consensus estimate of $2.04 a share.
Revenue of $742.6 million also fell short of the analyst estimate of $796.9 million.
The company said it’s planning to reduce head count by 5% to 6%. It reported about 7,000 employees worldwide as of Jan. 1, 2023.
QuidelOrtho’s stock fell by about 35% to $43.67, its lowest level since late 2017.
Raymond James downgraded the stock to outperform from strong buy due to a “major” 28% miss in earnings before interest, taxes, depreciation and amortization (Ebitda), but said the stock still appears to be undervalued.
Analysts cut their 2024 Ebitda estimate for the company by 27%.
“We have our misgivings on this front but despite this … we can’t help but find the QuidelOrtho business to be undervalued,” Raymond James analyst Andrew Cooper said. “We have long stated that the post-pandemic base being a moving target has hindered the stock, and while our base estimate moves lower we still think the core business can grow revenues at least in the mid-single digits with expanding margins.”
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