Wrapping up Q1 earnings, we look at the numbers and key takeaways for the research tools & consumables stocks, including Thermo Fisher (NYSE: TMO) 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 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 0.6% above.
While some research tools & consumables stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results.
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 print exceeded analysts’ expectations by 1.3%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ organic revenue estimates but a slight miss of analysts’ operating income estimates.
“We delivered very strong performance in the first quarter in a more uncertain macroeconomic environment, and I’m incredibly proud of our team's execution,” said Marc N. Casper, chairman, president, and chief executive officer of Thermo Fisher Scientific.
The stock is down 7.8% since reporting and currently trades at $400.50.
Is now the time to buy Thermo Fisher? 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 content with the results as the stock is up 3.1% since reporting. It currently trades at $190.50.
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 and EPS estimates.
Avantor delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 16.5% since the results and currently trades at $12.91.
Read our full analysis of Avantor’s results here.
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 number topped analysts’ expectations by 3.1%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ organic revenue and EPS estimates.
The stock is up 6.5% since reporting and currently trades at $12.24.
Read our full, actionable report on Sotera Health Company here, it’s free.
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 print surpassed analysts’ expectations by 4.3%. Aside from that, 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 scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 8.2% since reporting and currently trades at $36.21.
Read our full, actionable report on Bruker 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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