Oracle stock falls after report reveals thin margins in AI cloud business
Wednesday - Needham analysts have increased their price target on Azenta, Inc. (NASDAQ: AZTA) shares to $59.00, up from the previous $55.00, while maintaining a Buy rating on the company’s stock. This adjustment comes in response to Azenta’s first-quarter fiscal year 2025 performance, which showed revenue and earnings per share surpassing consensus estimates. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall score and holds more cash than debt on its balance sheet. Adjusted EBITDA aligned with analyst expectations, but when one-time items are excluded, it would have exceeded 10%. This indicates that the company’s margin guidance may be on the conservative side.[Want deeper insights? InvestingPro subscribers get access to 8 additional key tips about Azenta’s financial position and growth prospects, plus comprehensive Pro Research Reports covering 1,400+ top stocks.]
The company’s Service Management Solutions (SMS) growth was attributed to contributions from the Clinical & Industrial (C&I) sector and Sample Repository Solutions (SRS). Meanwhile, the Multiomics division saw growth due to advancements in Next (LON:NXT) Generation Sequencing (NGS) and gene synthesis. The report suggests that the current guidance from Azenta could leave room for future financial performance upside.
Needham anticipates that an upcoming Investor Day event scheduled for the summer will further illuminate Azenta’s growth trajectory and profitability outlook for the long term. The analysts’ decision to lift the price target reflects a forward-looking valuation metric extending into the calendar year 2026.
The analyst from Needham shared their perspective on the company’s financial results and future prospects. "Azenta’s F1Q25 revenue and EPS both beat consensus while adj. EBITDA was in line with Street estimates. Excluding one-time items, adj. EBITDA would have been >10% which makes the reiterated margin guidance look conservative, in our view," they commented. The analyst also expressed confidence in the company’s potential, stating, "In the near-term, we believe guidance should leave room for upside and, an Investor Day over the summer, should provide more clarity on AZTA’s growth and profitability potential over the longer-term."
The new price target of $59 is a reflection of the analysts’ optimistic outlook, rolling forward their valuation metric to the upcoming calendar year.
In other recent news, Azenta, Inc. has announced plans to sell its B Medical (TASE:PMCN) Systems segment, marking a strategic shift towards streamlining its portfolio and focusing on its core Sample Management Solutions and Multiomics businesses. The company has classified the B Medical Systems segment as a discontinued operation, following a thorough review by Azenta’s Board of Directors. In financial news, Azenta has furnished revised unaudited financial information to reflect the B Medical Systems segment as a discontinued operation, assisting investors in assessing the impact of the divestiture.
Analysts have reacted to these developments, with Needham cutting Azenta’s stock price target from $69 to $55 while maintaining a Buy rating. Similarly, Evercore ISI trimmed its price target to $48 from $50, citing a challenging macroeconomic environment.
In its recent earnings call, Azenta reported a slight decline in annual revenue to $656 million, but highlighted a 4% organic growth in its core businesses. The company also announced its transformation program "Ascend 2026", targeting operational simplification. These are the recent developments in Azenta’s business and financial landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.