Here’s Why You Should Retain Revvity Stock in Your Portfolio for Now – December 31, 2024

Revvity, Inc. (RVTY Quick QuoteRVTY – Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by its solid third-quarter 2024 performance and focus on artificial intelligence (AI), is expected to contribute further. Headwinds resulting from foreign exchange volatility and integration risks are major downsides.

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This Zacks Rank #3 (Hold) company’s shares have gained 1.8% in 2024 against the industry’s 12.4% decline. The S&P 500 has increased 26.3% during the same time frame.

The renowned provider of health science solutions has a market capitalization of $13.63 billion. It projects 6.7% growth for the next five years and expects to witness continued improvement in its business going further. Revvity’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 8.55%.

Image Source: Zacks Investment Research

Let’s delve deeper.

Upsides

Focus on AI: We are upbeat about the trend of healthcare companies using AI for quite some time now. Management at Revvity introduced PKeye Workflow Monitor, a cloud-based platform allowing laboratory personnel to remotely manage and monitor the company’s instruments and workflows in real time.

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Revvity also introduced Signals Research Suite, a complete cloud-based solution used by Amazon Web Services.

Promising Product Portfolio: We are optimistic about Revvity’s portfolio, which delivers a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way. During the first nine months of 2024, the company’s software and informatics division, Revvity Signals Software, demonstrated strong growth, a trend that is likely to continue in the fourth quarter and beyond on the back of new offerings. RVTY introduced three new SaaS-based offerings during the second quarter. These include Signals Clinical and Signals Synergy, which should help the company to expand into new markets.

Revvity has bolstered its innovation strategy with the launch of groundbreaking products in diagnostics and AI. PhenoLOGIC AI, an advanced tool for high-content screening, enhances image analysis and accelerates live cell data insights using pretrained AI models.

Meanwhile, the Revvity transcribed AI service automates handwritten data transcription in clinical labs, boosting workflow efficiency by 40%. Additionally, EUROIMMUN’s genotyping solution for Alzheimer’s therapies positions Revvity at the forefront of personalized medicine in Europe. These innovations demonstrate Revvity’s agility in meeting emerging healthcare needs and solidify its leadership in leveraging AI for transformative medical advancements.

Robust Q3 Results: RVTY’s diagnostic businesses have continued to remain strong during the quarter. The immunodiagnostics franchise, which is by far the largest category of the Diagnostics segment, reflected strong growth momentum. Moreover, a rise in pharma and biotech spending is in the cards, which may boost sales in 2025. Meanwhile, ongoing cost containment efforts are likely to improve margins going forward.

Downsides

Foreign Exchange Volatility: Increasing exposure to international markets enhances the risk of foreign exchange volatility. Fluctuations in currency exchange rates can adversely impact the company’s international sales. Due to sluggish Asian growth, especially in China, future revenues and earnings are likely to be affected if RVTY does not hedge against exposure to such fluctuations.

Integration Risks: Revvity continues to acquire a large number of companies. While this improves revenue opportunities, it also adds to integration risks. The frequent acquisitions can also negatively impact RVTY’s balance sheet in the form of a high level of goodwill and intangible assets. Frequent acquisitions are also a distraction for management and may adversely impact the company’s organic growth.

Estimate Trend

Revvity has been witnessing a positive estimate revision trend for 2024. Over the past 60 days, the Zacks Consensus Estimate for earnings per share (EPS) has moved north 1.9% to $4.84.

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The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $728 million, indicating a 4.6% improvement from the year-ago reported number. The Zacks Consensus Estimate for EPS is pinned at $1.36, implying a year-over-year improvement of 8.8%.

Stocks to Consider

Some better-ranked stocks in the broader medical space are Masimo (MASI Quick QuoteMASI – Free Report) , Accuray (ARAY Quick QuoteARAY – Free Report) and Abbott Laboratories (ABT Quick QuoteABT – Free Report) .

Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 31.7% against the industry’s 1% decline in the past six months.

Accuray, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.

ARAY’s shares have gained 8.8% against the industry’s 1% decline in the past six months.

Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.

ABT’s shares have risen 8.5% in the past six months compared with the industry’s 7.2% growth.