On Aug 29, Zacks Investment Research upgraded genetic devices
) to Outperform, based on its improved prospects. This leading
provider of microarray-based products and services to the global
research community achieved a Zacks #1 Rank (Strong Buy) for its
stock, shortly after reporting impressive second quarter results.
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Why the Upgrade?
Affymetrix reported earnings for the first time since the first
quarter of 2011. Adjusted earnings of $0.04 beat the Zacks
Consensus Estimate by a whopping 500% and surpassed the year-ago
loss of 13 cents per share. The company's restructuring plan to
shift focus toward high growth markets is finally paying off, as
demonstrated by the bottom line growth in the quarter.
Revenues grew 19.7% to $79.5 million, almost in line with the
Zacks Consensus Estimate. Over the past four quarters, Onyx
Pharma has delivered an average surprise of 262.50%. Strong
revenues from genotyping and cytogenetics products along with
moderate contribution from eBioscience have offset weak gene
expression array sales.
Following the release of the second quarter results, the Zacks
Consensus Estimate for 2013 earnings has gone up by 9 cents, from
a loss of 1 cent, settling at 8 cents per share. Moreover, the
Zacks Consensus Estimate for 2014 has also more than doubled to
15 cents per share from 6 cents.
We believe that the worst days are over for the company and
Affymetrix is ready for a turn around. In the face of declining
demand for Affymetrix' flagship GeneChip Expression products,
management strategy to transform AFFX into a company with a broad
reach in the high-growth markets for translational medicine,
molecular diagnostics and applied markets, is encouraging.
Despite a tight academic funding environment, new products,
acquisitions, and accretive agreements, along with restructuring
activities, should propel growth. Additionally, the company's
debt reduction efforts are also strengthening its balance sheet.
Other Stocks to Consider
Besides Affymetrix, other companies like
), all carrying a Zacks Rank #1 (Strong Buy), are also expected
to do well in the Medical-Biomed/Gene industry.