Qiagen Earnings: Resetting After COVID-19 Boom Years in Line With 2023 Outlook

Qiagen’s QIA first-quarter results mildly exceeded expectations, even when considering the significant COVID-19-related declines relative to a tough comparable period in 2022, when the omicron variant was surging. Management retained its 2023 guidance, which looks roughly in line with our expectations, and we are maintaining our $52/EUR 48 fair value estimate. We view the shares as moderately undervalued. While our moat rating remains none, we recognize that Qiagen’s operations have improved substantially in recent years even when excluding the COVID-related demand, and we expect the company to remain economically profitable throughout our five-year forecast period.

In the quarter, Qiagen’s sales and adjusted EPS exceeded management’s previous guidance in constant currency. Qiagen delivered particularly strong results in its QuantiFERON tuberculosis diagnostic tests. However, as the pandemic has turned endemic, Qiagen’s COVID-19-related product declines overwhelmed the non-COVID-19 results. Sales declined 20% in constant currency, including a 76% decline in COVID-related products and a 12% increase in non-COVID sales. This contraction in overall sales contributed to a 35% decline in adjusted EPS in constant currency to $0.52 in the quarter. While that decline was large, results actually exceeded management’s expectations of at least $0.47.

Management maintained its outlook for 2023 (including at least $2.05 billion in sales and at least $2.10 in adjusted EPS). This is similar to our expectations for the year and suggests that the firm’s financial results may remain constrained due to ongoing COVID-related declines. However, the comparable periods from 2022 start getting easier next quarter, and we expect more normalized growth patterns to start emerging later this year, which may relieve investors uncomfortable with the recent steep declines as COVID-related demand fizzled.