Key Takeaways QDEL signed a long-term supply pact with Lifotronic to expand its global immunoassay portfolio.Deal adds 25 new assays and access to 70-test menu across low- to high-throughput platforms.QuidelOrtho reported Q4 2025 revenues of $723.6M, up 2.2%, with EPS of 46 cents.QuidelOrtho (QDEL) recently entered a long-term strategic supply agreement with Lifotronic Technology to expand its global immunoassay portfolio across select international markets. The deal gives the company access to multiple ana ...

Core Insights - Bruker Corporation (BRKR) reported adjusted earnings per share (EPS) of 59 cents for Q4 2025, a decline of 22.4% year over year, and missed the Zacks Consensus Estimate by 9.2% [1][7] - The company’s total revenues for Q4 were $977.2 million, a slight decrease of 0.2% year over year, but exceeded the Zacks Consensus Estimate by 1.12% [3][10] - For the full year 2025, adjusted EPS was $1.83, down 24.1% from the previous year [2] Revenue Analysis - Q4 revenues by geography showed a 13.8% decline in the U.S. to $225 million, while Europe saw a 1% increase to $377 million, and Asia Pacific revenues rose 8.3% to $301.2 million [4] - The BSI BioSpin segment revenues fell 2% to $267 million, while BSI CALID revenues increased by 3.4% to $331.6 million [4] - Total revenues for 2025 reached $3.44 billion, reflecting a 2.1% increase from the previous year [3] Margin Performance - Gross profit decreased by 8.9% to $449.2 million, with gross margin contracting by 439 basis points to 46% due to an 8.6% rise in the cost of revenues [5][10] - Adjusted operating profit was $102.4 million, down 27.7% year over year, with adjusted operating margin contracting by 398 basis points to 10.5% [5] Financial Position - At the end of Q4 2025, Bruker had cash and cash equivalents of $298.8 million, an increase from $183.4 million at the end of 2024 [6] - Long-term debt at the end of Q4 2025 was $1.87 billion, down from $2.09 billion at the end of Q4 2024 [8] 2026 Guidance - Bruker provided guidance for 2026, expecting revenues between $3.57 billion and $3.60 billion, indicating a year-over-year growth of 4% to 5% [9] - Adjusted EPS for 2026 is projected to be in the range of $2.10 to $2.15, representing an increase of 15% to 17% year over year [9] Overall Assessment - The company ended Q4 2025 with mixed results, as earnings missed estimates while revenues surpassed them [10] - Margins were negatively impacted by lower volume, unfavorable mix, tariffs, and currency headwinds [10] - Despite challenges, Bruker’s innovation efforts showed promise, with expectations for improved contributions from the BEST segment in 2026 [11]

Core Insights - Waters Corporation (WAT) reported fourth-quarter 2025 non-GAAP earnings of $4.53 per share, exceeding the Zacks Consensus Estimate by 0.67% and reflecting a year-over-year increase of 10.5% [1] - Net sales reached $932.4 million, surpassing the Zacks Consensus Estimate by 0.55%, with a reported increase of 7% and a 6% increase on a constant currency basis year over year [1] Segment Performance - The Waters segment generated sales of $823.9 million, up 8% on a reported basis and 7% on a constant currency basis year over year, while the TA segment reported sales of $108.4 million, remaining flat year over year [2] - Instrument sales were $432.9 million, up 3% year over year, Services sales were $329.1 million, increasing 9% year over year, and Chemistry sales were $170.3 million, growing 13% year over year [3] Market Performance - The Pharmaceutical market generated sales of $540.6 million, an 8% increase year over year, while Industrial sales were $284.5 million, also up 8% year over year. Government & Academic sales decreased by 2% to $107.3 million [4] - Sales in Asia reached $283.9 million, up 4% reported and 11% at constant currency, while the Americas reported sales of $332.4 million, increasing 4% in both reported and constant currency terms. Europe generated sales of $315.9 million, a 13% increase reported and 4% at constant currency [5] Operating Details - Non-GAAP selling and administrative expenses were $191 million, up 13.3% year over year, with an increase of 120 basis points as a percentage of net sales. Research and development expenses were $50.1 million, up 8.3% year over year [6] - The adjusted operating margin was 35.2%, contracting by 20 basis points year over year [6] Financial Position - As of December 31, 2025, cash and cash equivalents were $587.8 million, up from $459.1 million as of September 27. The company generated cash from operations of $164.5 million and reported a free cash flow of $125.2 million [7] Guidance - Waters expects first-quarter 2026 sales growth between 7% and 9% on a constant currency basis, with organic reported sales projected between $718 million and $731 million, and full-year sales expected between $3.35 billion and $3.40 billion [8][9] - Non-GAAP earnings for the first quarter are anticipated to be in the range of $2.25 to $2.35 per share, indicating year-over-year growth of approximately 0.0% to 4.4% [9]

Company Overview - Revvity, Inc. is headquartered in Waltham, MA, and provides scientific instruments, consumables, and services to various markets including pharmaceutical, biomedical, environmental testing, chemical, and general industrial sectors. The company was previously known as PerkinElmer until March 2023 [11]. Recent Developments - In March 2023, Revvity completed the sale of its Applied, Food and Enterprise Services (AES) businesses to New Mountain Capital for up to $2.45 billion. Following this divestiture, the company changed its name to Revvity effective April 26, 2023, and its ticker symbol changed from PKI to RVTY on May 16, 2023 [11]. Stock Performance - Revvity (RVTY) currently holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of B. The stock has a Momentum Style Score of A, and shares have increased by 4.9% over the past four weeks [12]. - Two analysts have revised their earnings estimates upwards for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.02 to $5.33 per share. Revvity has an average earnings surprise of +4.1% [12]. Investment Consideration - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Revvity is recommended to be on investors' short list for potential investment opportunities [13].

Core Insights - The U.S. medical instrument and medtech sector is stabilizing as it enters 2026, with normalized procedure volumes post-pandemic and a focus on productivity and cost management [1][3] - Companies that can demonstrate operational improvements and earnings visibility are favored in the current investment environment, despite modest top-line growth [1][6] U.S. Macro Trends - Medtech equities are influenced by U.S. macroeconomic factors, particularly the Federal Reserve's interest rate policy, which is currently targeted between 3.5% and 3.75% [3] - Elevated labor and materials inflation rates have moderated, impacting margins more than demand, as companies align pricing and productivity with cost structures [4] Hospital Dynamics - U.S. hospitals are managing tight capital budgets while maintaining steady procedure volumes, benefiting companies with strong service and consumables revenue rather than those reliant on large equipment sales [5] - Staffing shortages are driving hospitals towards automation and efficiency, creating opportunities for device manufacturers offering productivity-enhancing solutions [5] Investment Opportunities in Undervalued Stocks - Undervalued medtech stocks may outperform through earnings recovery and multiple re-rating, as historical periods of uncertainty often compress valuations [6][7] - "Undervalued" stocks are defined as those trading below their historical valuation ranges, with potential for earnings growth through operational leverage and cost-reduction initiatives [7] Company-Specific Insights Fresenius Medical Care (FMS) - FMS is experiencing margin recovery due to cost savings and pricing improvements, with a current P/S F12M of 0.55x, below its 5-year median of 0.63x [10][11] - The company reported a rise in operating margin to 11.7% for Q3 2025, supported by cost savings and disciplined execution, with an expected earnings growth of 9% in 2026 [11][13] Integra LifeSciences (IART) - IART operates in neurosurgery and surgical instruments, currently trading at a P/S F12M of 0.59x, below its 5-year median of 2.14x [14][15] - The company anticipates supply normalization and margin expansion initiatives targeting $25-$30 million in savings, with expected earnings growth of 5.5% in 2026 [15][16] STERIS (STE) - STERIS provides sterilization services and is currently trading at a P/S F12M of 4.23x, slightly above its 5-year median of 3.97x [18][19] - The company reported high-single-digit organic revenue growth and expanded EBIT margin to 23.1%, with an expected earnings growth of 8.6% in 2026 [19][21]

Core Insights - The application of generative AI in the Medical Instruments industry has transitioned from experimental to operational, enhancing diagnostics, patient monitoring, and intervention workflows [1] - The global AI in healthcare market is projected to grow at a CAGR of 44% from 2025 to 2032, despite facing geopolitical challenges [2] - The medical instruments industry is highly fragmented, with significant trends including AI integration, telemedicine expansion, and robotic-assisted surgeries [3] Industry Trends - **Generative AI Adoption**: The medical instruments sector is experiencing a surge in generative AI adoption, with a focus on hyper-personalization and predictive treatment options. The global generative AI market in healthcare is valued at $2.64 billion in 2025, expected to grow at a CAGR of 35.2% through 2034 [4] - **M&A Activity**: The industry is witnessing a robust M&A trend, with MedTech deal value reaching $92.8 billion in 2025, driven by major acquisitions such as Abbott's $23 billion deal for Exact Sciences [5] - **Business Disruption**: Global growth is projected to remain subdued, with the IMF forecasting growth rates of 3.2% in 2025 and 3.1% in 2026, below pre-pandemic averages [6][7] Performance Metrics - The Zacks Medical Instruments industry currently holds a Zacks Industry Rank of 161, placing it in the bottom 33% of 243 Zacks industries, indicating poor near-term prospects [8] - The industry has underperformed the S&P 500 and broader sector over the past year, with a growth of 3.1% compared to the sector's 6.9% and the S&P 500's 19.3% [10] - The industry is trading at a forward P/E of 30.36X, higher than the broader industry average of 21.29X and the S&P 500's 23.42X [13] Company Highlights - **Veracyte**: A global cancer diagnostics company with a projected 2025 sales estimate of $508.6 million, reflecting a 14.1% increase from 2024 [18][19] - **IDEXX Laboratories**: Focused on veterinary and livestock testing, with a 2025 sales estimate of $4.28 billion, indicating a 9.9% rise from 2024 [21][22] - **Intuitive Surgical**: Specializes in minimally invasive care, with a 2025 sales estimate of $9.92 billion, suggesting an 18.7% increase from 2024 [25][26]

Core Insights - The replacement cycle for instruments has been ongoing for about a year, with significant momentum observed in orders outpacing revenues [1][2] - The growth rate for LC-MS instruments remains in the high single-digit range, driven by the replacement cycle and other factors [2][3] - The industry is still in the early stages of the replacement cycle, with many customer segments yet to begin replacing their instruments [3] Group 1 - The instrument replacement cycle is expected to continue, indicating a positive trend for future growth [3] - Current growth for LC-MS instruments is characterized by a low single-digit CAGR over the past six years, suggesting room for improvement [3] - The sales funnel for instruments is strong, indicating good future demand [3]

Company Overview - ChemoMetec A/S develops, manufactures, and markets instruments for cell counting and various other measurements, targeting the pharmaceutical, biotech, and agricultural industries globally [2] - The company was founded in 1997 and is listed on Nasdaq OMX Copenhagen [2] Managerial Transactions - The company has received a notification regarding transactions related to its shares made by persons in managerial positions, specifically mentioning CEO Martin Helbo Behrens [1]

Core Viewpoint - DexCom, Inc. is expected to report strong third-quarter results, driven by operational momentum, patient growth, and improved access, with a raised full-year revenue outlook reflecting confidence in demand and reimbursement expansion [1][2][8] Operational Performance - The company enters Q3 with solid operational momentum, supported by continued patient growth and a strengthening global footprint [2][8] - Commercial execution is a focal point, with healthy uptake of the product portfolio, particularly G7 and Stelo, despite competitive pressures [3][8] - Improved channel operations and access expansion are likely to have contributed to stronger prescription trends and pharmacy channel throughput [4][6] U.S. Market Dynamics - Strong new patient additions and integration with over 100 health systems have supported smoother prescription workflows [4][5] - Coverage for Type 2 diabetes patients not on insulin has broadened, with access secured through a major PBM, potentially covering around six million lives [4][5] International Trends - The international business has maintained healthy growth, driven by expanding Type 2 access and market penetration in regions like Ontario, France, and Japan [7][10] - Management expects continued international contribution, supported by growing awareness among primary care providers and improving prescription visibility [9][10] Stelo and New Market Initiatives - Stelo is an emerging growth vector, with over 400,000 app downloads and partnerships enhancing user engagement [11][12] - While currently a small financial contributor, Stelo is expected to represent 2% to 3% of 2025 sales, with ongoing feature expansion likely to accelerate adoption [12] Financial Outlook and Margin Progress - The company raised its full-year 2025 revenue outlook to $4.60 to $4.625 billion, reflecting 14% to 15% growth [13] - Gross margin is projected at approximately 62%, with expectations for sequential improvement as freight costs ease and inventory levels normalize [13][14] Estimate Picture - The Zacks Consensus Estimate for Q3 revenues is $1.18 billion, indicating an 18.4% improvement year-over-year, with EPS expected to increase by 26.7% to 57 cents [15] Long-Term Investment Visibility - Dexcom's long-term growth is supported by the expansion of the CGM category into Type 2 and pre-diabetes markets, with improving coverage and digital workflow integration [24][25] - Innovation remains central to the strategy, with advancements in product offerings and software enhancing usability and user engagement [25][26]

Core Insights - Conestoga Capital Advisors reported that equity markets reached new all-time highs in Q3 2025, but their Mid Cap Composite underperformed with a return of -3.2% net-of-fees compared to a 2.8% gain for the Russell Midcap Growth Index [1] - The focus on high-quality, profitable companies struggled in a risk-on environment during the quarter [1] Company Overview: IDEXX Laboratories, Inc. - IDEXX Laboratories, Inc. is a leader in diagnostics and information systems for veterinary, food, and water testing applications [3] - The company reported a one-month return of -1.74% and a 52-week gain of 38.06%, with shares closing at $637.13 on October 21, 2025, and a market capitalization of $50.97 billion [2] - IDEXX's revenue increased by 11% as reported and 9% organically in Q2 2025, despite weak veterinarian visits [4] Performance and Market Position - IDEXX Laboratories experienced strong earnings in Q3 2025, with accelerated organic revenue growth and rapid adoption of their latest premium instrument [3] - The number of hedge funds holding IDEXX shares decreased from 51 to 48 from the previous quarter, indicating a slight decline in popularity among institutional investors [4]