As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the life sciences tools & services industry, including Illumina (NASDAQ: ILMN) and its peers.
The life sciences tools and services sector supports biotech and pharmaceutical R&D and commercialization by providing lab equipment, data analytics, and clinical trial services. These companies benefit from recurring revenue and high margins on specialized products. Looking ahead, the sector is supported by tailwinds like advancements in genomics, personalized medicine, and the use of AI in drug discovery. However, the persistent challenge is dependence on the R&D budgets of large pharmaceutical companies and the volatility of smaller biotech firms. Future headwinds include uncertain research funding and pricing pressures from cost-conscious customers.
The 21 life sciences tools & services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.2% while next quarter’s revenue guidance was 0.5% below.
Thankfully, share prices of the companies have been resilient as they are up 9.5% on average since the latest earnings results.
Illumina (NASDAQ: ILMN)
Pioneering the ability to read the human genome at unprecedented speed and affordability, Illumina (NASDAQ: ILMN) develops and sells advanced DNA sequencing and microarray technologies that allow researchers and clinicians to analyze genetic variations and functions.
Illumina reported revenues of $1.06 billion, down 3% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.
Illumina delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 2.5% since reporting and currently trades at $100.25.
Is now the time to buy Illumina? Access our full analysis of the earnings results here, it’s free.
Best Q2: West Pharmaceutical Services (NYSE: WST)
Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE: WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.
West Pharmaceutical Services reported revenues of $766.5 million, up 9.2% year on year, outperforming analysts’ expectations by 5.6%. The business had a stunning quarter with an impressive beat of analysts’ full-year EPS guidance estimates and full-year revenue guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 8.6% since reporting. It currently trades at $246.95.
Is now the time to buy West Pharmaceutical Services? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Bruker (NASDAQ: BRKR)
With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ: BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.
Bruker reported revenues of $797.4 million, flat year on year, falling short of analysts’ expectations by 1.5%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS estimates.
Bruker delivered the weakest full-year guidance update in the group. As expected, the stock is down 9.7% since the results and currently trades at $34.30.
Read our full analysis of Bruker’s results here.
Charles River Laboratories (NYSE: CRL)
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE: CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Charles River Laboratories reported revenues of $1.03 billion, flat year on year. This number topped analysts’ expectations by 4.6%. Overall, it was a stunning quarter as it also put up an impressive beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.
The stock is down 2.5% since reporting and currently trades at $163.31.
Read our full, actionable report on Charles River Laboratories here, it’s free.
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 $983.2 million, up 3.9% year on year. This result beat analysts’ expectations by 2.9%. It was a strong quarter as it also logged a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ full-year EPS guidance estimates.
The stock is up 5.4% since reporting and currently trades at $1,301.
Read our full, actionable report on Mettler-Toledo 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
