Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let’s have a look at West Pharmaceutical Services (NYSE: WST) and its peers.
Companies specializing in drug development inputs and services play a crucial role in the pharmaceutical and biotechnology value chain. Essential support for drug discovery, preclinical testing, and manufacturing means stable demand, as pharmaceutical companies often outsource non-core functions with medium to long-term contracts. However, the business model faces high capital requirements, customer concentration, and vulnerability to shifts in biopharma R&D budgets or regulatory frameworks. Looking ahead, the industry will likely enjoy tailwinds such as increasing investment in biologics, cell and gene therapies, and advancements in precision medicine, which drive demand for sophisticated tools and services. There is a growing trend of outsourcing in drug development for nimbleness and cost efficiency, which benefits the industry. On the flip side, potential headwinds include pricing pressures as efforts to contain healthcare costs are always top of mind. An evolving regulatory backdrop could also slow innovation or client activity.
The 8 drug development inputs & services stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.8%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 14.5% since the latest earnings results.
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 $748.8 million, up 2.3% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a softer quarter for the company with full-year revenue guidance missing analysts’ expectations.
The stock is down 28.2% since reporting and currently trades at $231.80.
Read our full report on West Pharmaceutical Services here, it’s free.
Best Q4: Azenta (NASDAQ: AZTA)
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Azenta reported revenues of $147.5 million, up 4.1% year on year, outperforming analysts’ expectations by 1.1%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 27.6% since reporting. It currently trades at $37.66.
Is now the time to buy Azenta? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Fortrea (NASDAQ: FTRE)
Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea (NASDAQ: FTRE) is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.
Fortrea reported revenues of $697 million, down 1.8% year on year, falling short of analysts’ expectations by 0.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Fortrea delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 35.6% since the results and currently trades at $8.93.
Read our full analysis of Fortrea’s results here.
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 $144.1 million, up 41.9% year on year. This print topped analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also recorded a decent beat of analysts’ EPS estimates.
UFP Technologies pulled off the fastest revenue growth among its peers. The stock is down 12.7% since reporting and currently trades at $210.
Read our full, actionable report on UFP Technologies here, it’s free.
IQVIA (NYSE: IQV)
Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA (NYSE: IQV) provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.
IQVIA reported revenues of $3.96 billion, up 2.3% year on year. This result surpassed analysts’ expectations by 0.6%. Zooming out, it was a mixed quarter as it also logged a narrow beat of analysts’ constant currency revenue estimates but full-year revenue guidance slightly missing analysts’ expectations.
The stock is down 9.8% since reporting and currently trades at $185.20.
Read our full, actionable report on IQVIA here, it’s free.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
