Looking back on research tools & consumables stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Sotera Health Company (NASDAQ: SHC) 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 9 research tools & consumables stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 6.3% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 6.8%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ organic revenue and full-year EPS guidance estimates.
“We are pleased to announce that we delivered more than 6% top-line growth for the quarter, supported by strong volume performance at Sterigenics. Adjusted EBITDA grew nearly 10% in the quarter with approximately 160 basis points of margin expansion, driven by over 500 basis points of improvement at Nelson Labs,” said Chairman and Chief Executive Officer, Michael B. Petras,
Sotera Health Company pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 45% since reporting and currently trades at $16.30.
Is now the time to buy Sotera Health Company? Access our full analysis of the earnings results 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, outperforming analysts’ expectations by 2.9%. The business had a strong quarter with an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ full-year EPS guidance estimates.
The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $1,317.
Is now the time to buy Mettler-Toledo? 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 and a significant miss of analysts’ EPS estimates.
Bruker delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 9.7% since the results and currently trades at $34.30.
Read our full analysis of Bruker’s results here.
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 number topped analysts’ expectations by 0.6%. Aside from that, it was a slower quarter as it recorded EPS in line with analysts’ estimates and organic revenue in line with analysts’ estimates.
Avantor had the slowest revenue growth among its peers. The stock is down 4.2% since reporting and currently trades at $12.88.
Read our full, actionable report on Avantor 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 $10.86 billion, up 3% year on year. This result beat analysts’ expectations by 1.6%. Overall, it was a strong quarter as it also recorded a narrow beat of analysts’ organic revenue estimates and a decent beat of analysts’ operating income estimates.
The stock is up 15.4% since reporting and currently trades at $492.49.
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.
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