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On Thursday, Evercore ISI analyst Vijay Kumar adjusted the price target for OraSure Technologies (NASDAQ:OSUR), reducing it to $3.00 from the previous $4.00. Despite this change, Kumar retained an In Line rating for the company’s stock. According to InvestingPro analysis, the company appears undervalued at its current market cap of $216 million, with the stock trading near its 52-week low of $2.69. InvestingPro Tips highlight that the company holds more cash than debt on its balance sheet, suggesting financial stability despite market challenges. OraSure’s first-quarter revenue was reported at $29.9 million, slightly surpassing the guidance range of $27.5 million to $31.5 million, which was approximately 190 basis points above the standard threshold. However, when excluding COVID-related revenue, the base revenue of approximately $29.5 million was down by 2% year-over-year, within the guided range of $27 million to $31 million.
The company’s diagnostics (Dx) revenue showed growth, with an 8% year-over-year increase to $17.7 million. In contrast, revenues from Sample Management Solutions (SMS) saw a decline of 16% year-over-year, amounting to $9.1 million. The gross margin (GM) stood at 41.7%, slightly better than the standard by about 90 basis points but showed a decline of approximately 350 basis points year-over-year. InvestingPro data reveals a strong current ratio of 9.95, indicating robust short-term liquidity, though the company remains unprofitable over the last twelve months. This decrease was attributed to the drop in COVID-19 revenues and a higher mix of international sales.
OraSure’s total operating expenses for the quarter were roughly $27.7 million, which marked a significant 28% increase from the previous quarter, primarily due to Sherlock’s impact. This led to an operating loss of $15.3 million. The balance sheet and free cash flow (FCF) indicated that OraSure ended the first quarter with approximately $247.6 million in cash, with a free cash flow burn for the fiscal year 2024 projected at $19.3 million.
Looking ahead, OraSure has updated its guidance for the second quarter, anticipating revenues between $28.5 million and $32.5 million, which is modestly below the market prediction by 5%. InvestingPro analysis shows a compelling free cash flow yield of 11%, though analysts anticipate a sales decline in the current year. For deeper insights into OraSure’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, covering over 1,400 US stocks with expert analysis and actionable intelligence. This forecast includes roughly $0.5 million from COVID-19 and Risk Assessment, with base revenues excluding COVID, Risk Assessment, and molecular services projected to be in the range of $28 million to $32 million. Gross margins for the second quarter are expected to remain flat or increase slightly quarter-over-quarter, with a potential expansion in the second half of the year due to growth and volume. Operating expenses are expected to be in the low $20 million range, plus an additional $10 million earmarked for innovation investments, including $7-8 million for Sherlock.
In other recent news, OraSure Technologies Inc. reported its first-quarter 2025 earnings, showing a narrower-than-expected loss per share and slightly higher revenue than anticipated. The company’s earnings per share (EPS) was -$0.18, surpassing the forecast of -$0.205, while revenue reached $29.9 million, exceeding expectations of $29.65 million. Despite these positive results, the company experienced a 2% decrease in total revenue year-over-year, with diagnostic products showing an 8% growth, whereas Sample Management Solutions revenue decreased by 16%. The company maintains a strong cash position with $248 million and no debt, positioning it well for future investments. OraSure is also advancing its product innovation pipeline with upcoming FDA submissions, including the CTNG test. In addition to earnings, OraSure’s board authorized the repurchase of up to $40 million of its common stock over the next two years. The company is exploring mergers and acquisitions to drive future growth, focusing on expanding its B2B2C testing markets. Looking ahead, OraSure has set a revenue guidance range of $28.5 to $32.5 million for Q2 2025.
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