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On Thursday, Jefferies analyst Tycho Peterson upgraded Quidel (NASDAQ:QDEL) Corporation stock from Hold to Buy, setting a price target of $44.00. Currently trading at $34.87, the stock sits between analyst targets ranging from $27 to $60. The decision comes after the company demonstrated a year-over-year EBITDA margin improvement of 450 basis points, with current EBITDA at $528.3 million. Peterson noted the change was influenced by positive developments in the company’s financial performance and strategic initiatives.
Quidel, a provider of diagnostic testing solutions, has recently shown signs of an early turnaround under the leadership of CEO Brian Blaser. According to Peterson, the company has outlined a clear plan to fully mitigate tariff exposure and set expectations for robust growth in China. InvestingPro analysis indicates the company maintains a "Fair" overall financial health score of 2.21 out of 5, with particularly strong relative value metrics.
The upgrade reflects a shift in the analyst’s perspective since December, when the Hold rating was primarily based on concerns about execution uncertainty. Despite the cheap valuation at that time, Jefferies was cautious due to the company’s performance.
The analyst’s current outlook is buoyed by the company’s valuation, which has decreased by approximately three times since the initial evaluation. With the enterprise value to EBITDA (EV/EBITDA) ratio now below its three-year average of around 8.5x, the risk-reward outlook for Quidel is deemed favorable by Jefferies.
Quidel’s recent report, which includes the notable margin improvement and strategic plans, suggests that the company is on track to return to sales growth and achieve a mid to high 20’s EBITDA margin within the next two to three years. The company currently maintains a gross profit margin of 46.23% on revenues of $2.78 billion. This progress has contributed to the analyst’s upgraded stance on the stock. For deeper insights into Quidel’s financial health and growth prospects, investors can access detailed metrics and analysis through InvestingPro’s comprehensive research tools.
In other recent news, QuidelOrtho reported its financial results for the first quarter of 2025, showcasing a notable performance. The company achieved an adjusted earnings per share (EPS) of $0.74, exceeding the expected $0.61, marking a 21.3% surprise. However, revenue slightly missed the forecast, coming in at $693 million against the anticipated $694.43 million. Despite this minor revenue shortfall, the company’s strategic initiatives and cost-saving measures have contributed to a 68% year-over-year increase in adjusted EPS. Analysts from various firms have shown interest in QuidelOrtho’s ability to mitigate tariff impacts, which could cost $30-40 million in 2025, through strategic pricing and supply chain adjustments. The company maintains its full-year guidance for 2025, projecting total revenue between $2.6 billion and $2.81 billion, with an adjusted EPS range of $2.07 to $2.57. QuidelOrtho is focusing on its core businesses, aiming for significant cost savings and operational efficiencies throughout the year. The company’s leadership remains optimistic about future growth, particularly in its molecular diagnostics and respiratory segments.
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