The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how research tools & consumables stocks fared in Q1, starting with Sotera Health Company (NASDAQ: SHC).
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 9 research tools & consumables stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 1.1% above.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $254.5 million, up 2.6% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a solid beat of analysts’ EPS estimates.
“We are pleased to report a solid start to the year with mid-single digit revenue growth and strong double digit Adjusted EBITDA growth, on a constant currency basis,” said Chairman and Chief Executive Officer, Michael B. Petras,
Interestingly, the stock is up 15.1% since reporting and currently trades at $13.23.
Is now the time to buy Sotera Health Company? Access our full analysis of the earnings results here, it’s free.
Best Q1: Danaher (NYSE: DHR)
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE: DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Danaher reported revenues of $5.74 billion, flat year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $194.82.
Is now the time to buy Danaher? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.58 billion, down 5.9% year on year, falling short of analysts’ expectations by 1.6%. It was a softer quarter as it posted a miss of analysts’ organic revenue and EPS estimates.
Avantor delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 20.6% since the results and currently trades at $12.28.
Read our full analysis of Avantor’s results here.
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 $883.7 million, down 4.6% year on year. This number topped analysts’ expectations by 1%. More broadly, it was a slower quarter as it recorded a miss of analysts’ full-year EPS guidance estimates.
The stock is up 4.4% since reporting and currently trades at $1,102.
Read our full, actionable report on Mettler-Toledo here, it’s free.
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 $10.36 billion, flat year on year. This print surpassed analysts’ expectations by 1.3%. Aside from that, it was a mixed quarter as it also recorded a narrow beat of analysts’ organic revenue estimates but a slight miss of analysts’ operating income estimates.
The stock is down 5.4% since reporting and currently trades at $410.74.
Read our full, actionable report on Thermo Fisher here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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