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 research tools & consumables industry, including Bruker (NASDAQ: BRKR) 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.5% below.
While some research tools & consumables stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1% since the latest earnings results.
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. This print fell short of analysts’ expectations by 1.5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates.
Bruker delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 17.1% since reporting and currently trades at $31.46.
Read our full report on Bruker here, it’s free.
Best Q2: 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 $294.3 million, up 6.4% year on year, outperforming analysts’ expectations by 6.8%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue and full-year EPS guidance estimates.
Sotera Health Company pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 40.4% since reporting. It currently trades at $15.78.
Is now the time to buy Sotera Health Company? Access our full analysis of the earnings results here, it’s free.
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 $1.68 billion, down 1.1% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted EPS and organic revenue in line with analysts’ estimates.
Avantor delivered the slowest revenue growth in the group. As expected, the stock is down 11% since the results and currently trades at $11.97.
Read our full analysis of Avantor’s results here.
Revvity (NYSE: RVTY)
Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE: RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.
Revvity reported revenues of $720.3 million, up 4.1% year on year. This result surpassed analysts’ expectations by 1.1%. Aside from that, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a slight miss of analysts’ full-year EPS guidance estimates.
The stock is down 19.9% since reporting and currently trades at $83.04.
Read our full, actionable report on Revvity 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 number topped analysts’ expectations by 2.9%. It was a strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ full-year EPS guidance estimates.
The stock is down 2% since reporting and currently trades at $1,210.
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.
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