Let’s dig into the relative performance of Waters Corporation (NYSE: WAT) and its peers as we unravel the now-completed Q1 research tools & consumables earnings season.
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 Q1. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 0.5% above.
Thankfully, share prices of the companies have been resilient as they are up 5.2% on average since the latest earnings results.
Waters Corporation (NYSE: WAT)
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE: WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Waters Corporation reported revenues of $661.7 million, up 3.9% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter for the company with a narrow beat of analysts’ organic revenue estimates.
"Thanks to the focus and dedication of our teams, the momentum in our business has remained strong despite a very dynamic external environment," said Dr. Udit Batra, President & CEO, Waters Corporation.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $350.22.
Is now the time to buy Waters Corporation? Access our full analysis of the earnings results here, it’s free.
Best Q1: Danaher (NYSE: DHR)
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE: DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Danaher reported revenues of $5.74 billion, flat year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue and EPS estimates.
The market seems happy with the results as the stock is up 10% since reporting. It currently trades at $203.20.
Is now the time to buy Danaher? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.58 billion, down 5.9% year on year, falling short of analysts’ expectations by 1.6%. It was a softer quarter as it posted a miss of analysts’ organic revenue estimates and a slight miss of analysts’ EPS estimates.
Avantor delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 10.3% since the results and currently trades at $13.88.
Read our full analysis of Avantor’s results here.
Bio-Techne (NASDAQ: TECH)
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ: TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Bio-Techne reported revenues of $316.2 million, up 4.2% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is up 12.1% since reporting and currently trades at $53.40.
Read our full, actionable report on Bio-Techne here, it’s free.
Thermo Fisher (NYSE: TMO)
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE: TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Thermo Fisher reported revenues of $10.36 billion, flat year on year. This result topped analysts’ expectations by 1.3%. Zooming out, it was a mixed quarter as it also logged a narrow beat of analysts’ organic revenue estimates but a slight miss of analysts’ operating income estimates.
The stock is down 1.1% since reporting and currently trades at $429.33.
Read our full, actionable report on Thermo Fisher here, it’s free.
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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