Looking back on research tools & consumables stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Danaher (NYSE: DHR) 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 9 research tools & consumables stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 1.1% above.
While some research tools & consumables stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.4% since the latest earnings results.
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. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue and EPS estimates.
Interestingly, the stock is up 1.7% since reporting and currently trades at $188.
Is now the time to buy Danaher? Access our full analysis of the earnings results here, it’s free.
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 $254.5 million, up 2.6% year on year, outperforming analysts’ expectations by 3.1%. The business had a 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 14.6% since reporting. It currently trades at $13.17.
Is now the time to buy Sotera Health Company? 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 and EPS estimates.
Avantor delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 17.1% since the results and currently trades at $12.83.
Read our full analysis of Avantor’s results here.
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 $801.4 million, up 11% year on year. This number surpassed analysts’ expectations by 4.3%. Zooming out, it was a satisfactory quarter as it also produced a solid beat of analysts’ organic revenue estimates but a significant miss of analysts’ full-year EPS guidance estimates.
Bruker achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 6.3% since reporting and currently trades at $36.94.
Read our full, actionable report on Bruker here, it’s free.
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 result topped analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter as it also recorded a narrow beat of analysts’ organic revenue estimates.
The stock is flat since reporting and currently trades at $345.38.
Read our full, actionable report on Waters Corporation here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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