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Biomerieux (EPA:BIOX) SA reported its second-half fiscal year 2024 results on Friday, posting a strong quarter largely driven by its Molecular business, with sales surpassing consensus expectations by 6%.
However, the stock traded lower following the announcement, reflecting investor caution despite the solid performance.
The standout performance came from BIOFIRE sales, which posted an 11% year-over-year increase, boosting overall revenue growth.
However, the earnings report also flagged a decline in SPOTFIRE sales, which fell to €42 million in the fourth quarter, down from €53 million in the previous quarter.
Analysts at Morgan Stanley (NYSE:MS) attributed this drop to a shift in placement strategy, as McKesson (NYSE:MCK) placed the diagnostic units in lower-volume settings compared to Biomerieux’s typical high-volume hospital installations. This development affected customer pull-through rather than reflecting a pricing issue.
The biotechnology company expects SPOTFIRE sales to reach €190 million in 2025, doubling the €95 million recorded in 2024.
The company remains on pace to achieve its €450 million revenue target by 2028, in line with investor expectations of €150 million to €200 million.
However, the fourth-quarter sales drop may dampen near-term optimism, even with the strong early placement of 900 SPOTFIRE units in January.
For fiscal year 2025, Biomerieux projected organic sales growth of at least 7% and adjusted EBIT growth of at least 10% at constant currency.
The company also noted an anticipated foreign exchange headwind of €30 million, which implies a 3% reduction in consensus EBIT estimates.
This translates to an expected 2025 EBIT of €710 million, slightly below consensus projections of €730 million.
Despite these conservative forecasts, Morgan Stanley analysts see little evidence to undermine the broader investment case for Biomerieux, particularly given the robust Molecular division performance.
With the company’s stock already up 11% year-to-date and outperforming sector peers such as DiaSorin and Qiagen (NYSE:QGEN) by 15% and 25%, respectively, the in-line sales guidance and EBIT adjustments may not be sufficient to drive further re-rating in the near term.