By Shares of QuidelOrtho took a dive on Wednesday following a challenging quarter, leaving investors on Wall Street dissatisfied.
QuidelOrtho stock plunged 40% to $40 in premarket trading on Wednesday.
The healthcare diagnostics manufacturer reported adjusted per-share earnings of $1.17 for the fourth quarter, which fell well short of analysts’ expectations of $2.04, according to FactSet. Furthermore, the company’s revenue of $743 million also missed the projected $797 million.
The outlook for QuidelOrtho didn’t provide much reassurance either. For fiscal 2024, the company expects adjusted per-share earnings between $2.40 and $3.07, significantly lower than analysts’ estimates of $4.44.
As a result of the disappointing quarterly report, William Blair analysts led by Andrew Brackmann downgraded QuidelOrtho shares from Outperform to Market Perform.
According to a research note from the analysts, the disparity in profitability guidance was mainly attributed to lower-than-expected respiratory revenue. The management’s decision to take a cautious approach in guiding these high-margin sales at the start of the year may instill confidence in long-term projections, but it presents challenges in the short term.
Despite the downgrade, William Blair remains optimistic about QuidelOrtho’s potential. They believe that if the management can demonstrate an improvement in the second half of the year and provide more clarity on cost savings and long-term goals, an upgrade from the analysts is possible.
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