Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Avantor (NYSE:AVTR) and its peers.
The life sciences subsector specializing in research tools and consumables enables scientific discoveries across academia, biotechnology, and pharmaceuticals. These firms supply a wide range of essential laboratory products, ensuring a recurring revenue stream through repeat purchases and replenishment. Their business models benefit from strong customer loyalty, a diversified product portfolio, and exposure to both the research and clinical markets. However, challenges include high R&D investment to maintain technological leadership, pricing pressures from budget-conscious institutions, and vulnerability to fluctuations in research funding cycles. Looking ahead, this subsector stands to benefit from tailwinds such as growing demand for tools supporting emerging fields like synthetic biology and personalized medicine. There is also a rise in automation and AI-driven solutions in laboratories that could create new opportunities to sell tools and consumables. Nevertheless, headwinds exist. These companies tend to be at the mercy of supply chain disruptions and sensitivity to macroeconomic conditions that impact funding for research initiatives.
The 10 research tools & consumables stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.5% below.
Thankfully, share prices of the companies have been resilient as they are up 9.7% on average since the latest earnings results.
Avantor (NYSE:AVTR)
With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.
Avantor reported revenues of $1.68 billion, down 1.1% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a slower quarter for the company with EPS and organic revenue in line with analysts’ estimates.
"In the second quarter, we remained focused on driving growth, enhancing operating leverage, and executing with discipline," said Michael Stubblefield, President and Chief Executive Officer.
Avantor delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 2.8% since reporting and currently trades at $13.82.
Read our full report on Avantor here, it’s free.
Best Q2: Sotera Health Company (NASDAQ:SHC)
With a critical role in ensuring the safety of millions of patients worldwide, Sotera Health (NASDAQGS:SHC) provides sterilization services, lab testing, and advisory services to ensure medical devices, pharmaceuticals, and food products are safe for use.
Sotera Health Company reported revenues of $294.3 million, up 6.4% year on year, outperforming analysts’ expectations by 6.8%. The business had a stunning quarter with a solid beat of analysts’ organic revenue and full-year EPS guidance estimates.
Sotera Health Company delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 41.3% since reporting. It currently trades at $15.88.
Is now the time to buy Sotera Health Company? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Bruker (NASDAQ:BRKR)
With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ:BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.
Bruker reported revenues of $797.4 million, flat year on year, falling short of analysts’ expectations by 1.5%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Bruker delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 9.1% since the results and currently trades at $34.50.
Read our full analysis of Bruker’s results here.
Thermo Fisher (NYSE:TMO)
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Thermo Fisher reported revenues of $10.86 billion, up 3% year on year. This print surpassed analysts’ expectations by 1.6%. Overall, it was a strong quarter as it also recorded a narrow beat of analysts’ organic revenue and operating income estimates.
The stock is up 21.2% since reporting and currently trades at $517.50.
Read our full, actionable report on Thermo Fisher here, it’s free.
Mettler-Toledo (NYSE:MTD)
With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE:MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.
Mettler-Toledo reported revenues of $983.2 million, up 3.9% year on year. This result topped analysts’ expectations by 2.9%. It was a strong quarter as it also put up an impressive beat of analysts’ organic revenue estimates.
The stock is up 5.4% since reporting and currently trades at $1,301.
Read our full, actionable report on Mettler-Toledo here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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