As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at life sciences tools & services stocks, starting with 10x Genomics (NASDAQ: TXG).
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 Q1. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was 0.5% above.
In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results.
10x Genomics (NASDAQ: TXG)
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ: TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
10x Genomics reported revenues of $154.9 million, up 9.8% year on year. This print exceeded analysts’ expectations by 16.7%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.
"Customer enthusiasm and improving consumables trends reinforce our conviction in our technology and in the potential of Single Cell and Spatial," said Serge Saxonov, Co-founder and CEO of 10x Genomics.
10x Genomics pulled off the biggest analyst estimates beat of the whole group. The stock is up 27.6% since reporting and currently trades at $10.99.
Is now the time to buy 10x Genomics? Access our full analysis of the earnings results here, it’s free.
Best Q1: UFP Technologies (NASDAQ: UFPT)
With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ: UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.
UFP Technologies reported revenues of $148.1 million, up 41.1% year on year, outperforming analysts’ expectations by 5.9%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates.
UFP Technologies pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 18.2% since reporting. It currently trades at $233.14.
Is now the time to buy UFP Technologies? 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 12.9% since the results and currently trades at $13.47.
Read our full analysis of Avantor’s results here.
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 $1.04 billion, down 1.4% year on year. This number surpassed analysts’ expectations by 0.5%. More broadly, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is up 14.6% since reporting and currently trades at $91.19.
Read our full, actionable report on Illumina 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. This result topped analysts’ expectations by 3.1%. It was a strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 3.5% since reporting and currently trades at $11.09.
Read our full, actionable report on Sotera Health Company here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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