Quidel Corporation QDEL is scheduled to report second-quarter 2021 results on Aug 5, after the closing bell.

In the last-reported quarter, the company’s earnings of $4.38 lagged the Zacks Consensus Estimate by 10.1%. Over the trailing four quarters, its earnings outperformed the consensus mark on three occasions and missed the same in one, delivering an earnings surprise of 22.95%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

In the last-reported quarter, Quidel registered solid uptick in sales of Rapid Immunoassay and Molecular Diagnostic Solutions products, driven by strong demand for both rapid antigen and polymerase chain reaction (“PCR”) COVID-19 tests. Given the continued pandemic-led testing requirements over the past few months, these products are expected to maintain their sales momentum, thereby driving up the company’s top line in the second quarter.

It should, however, be noted that testing requirements might have slightly ebbed due to increased vaccine rollout. Although this might slightly offset the company’s testing volumes, it is unlikely to cause any major decline in revenues.

Quidel Corporation Price and EPS Surprise

Quidel Corporation price-eps-surprise | Quidel Corporation Quote

Quidel, in June, received the FDA’s amended Emergency Use Authorization (“EUA”) which allows the company to market Sofia Q, its latest addition to the Sofia and Sofia 2 line of Fluorescent Immunoassay Analyzers (“FIA”). In May, the company received Health Canada’s authorization for its Sofia SARS Antigen FIA, thereby becoming the first rapid antigen test for serial testing for active coronavirus infection in both symptomatic and asymptomatic populations. This slew of regulatory approvals is likely to drive investors’ optimism for the stock, thereby pushing up revenues in the to-be-reported quarter.

The company, in May, announced that its non-prescription QuickVue At-Home OTC COVID-19 Test (which received the FDA’s EUA in March) is available in the United States to consumers for online order through e-commerce retailer Amazon.com, Inc. AMZN. The same month, Quidel announced a retail collaboration with Walgreens to make Quidel’s non-prescription QuickVue At-Home OTC COVID-19 Test available to consumers at various Walgreens locations across the United States and Puerto Rico. These are likely to drive sales volumes, thus contributing to the company’s top line.

Quidel, in April, announced that it has completed a distribution and fulfillment agreement with McKesson Corporation to expedite consumer access to Quidel’s non-prescription QuickVue At-Home OTC COVID-19 Test. These developments are expected to lead to wider customer adoption, thereby driving up the company’s revenues in the second quarter.

Other probable contributors to the company’s revenues in the to-be-reported quarter are robust sales of Lyra PCR and Solana SARS-CoV-2 assays. Also, Quidel is expected to continue to derive benefits from its rapidly expanding installed base of Sofia analyzers leveraging the exponential rise of telemedicine to drive sales of its full array of Sofia assays for flu, Strep and various other conditions.

The Estimate Picture

For second-quarter 2021, the Zacks Consensus Estimate of $173.3 million for total revenues implies a decline of 14.1% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at $1.20, indicating a fall of 35.5% from the prior-year period’s reported number.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Quidel has an Earnings ESP of +7.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).

Stocks Worth a Look

Here are a couple of medical stocks worth considering which have the right combination of elements to beat on earnings this reporting cycle.

Henry Schein, Inc. HSIC has an Earnings ESP of +0.45% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina, Inc. ILMN has an Earnings ESP of +2.36% and a Zacks Rank of 2, at present.

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Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

Quidel Corporation (QDEL) : Free Stock Analysis Report

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