2024-04-13 12:38:54 ET
Summary
- QuidelOrtho's profitability has been impacted by higher depreciation and non-operating expenses, but improvements in gross margins and reduced expenses are expected in 2024.
- The company's revenue growth in 2023 was below targets, with the Labs segment outperforming expectations and the Transfusion Medicine, Point of Care, and Molecular Diagnostics segments underperforming.
- Internal weaknesses such as management changes, declining R&D spending, product recalls, and high indebtedness pose challenges for QuidelOrtho's growth prospects.
- However, QuidelOrtho remains undervalued given its massive share price decline, which could be a huge opportunity for investors to go bottom fishing.
In our previous analysis of QuidelOrtho Corporation ( QDEL ), we focused on the company’s profitability, highlighting its lower-than-expected margins mainly due to a higher-than-anticipated depreciation with higher fixed assets and other non-operating expenses. However, we revised our forecasts while still expecting an improvement in average gross margins and reduced non-operating expenses in 2024, leading to an increase in net margins. Furthermore, we forecasted a 5-year forward average FCF margin of 15%....
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QuidelOrtho: Attractive Valuation Despite Weak Performance