Affymetrix Down to Underperform - Analyst Blog
April 15 2013 - 9:50AM
Zacks
On Apr 12, we downgraded genetic
products company, Affymetrix Inc. (AFFX) to
Underperform based on the company’s disappointing preliminary data
for the first quarter of 2013.
Why the Downgrade?
Estimates for Affymetrix have been declining ever since it reported
preliminary first-quarter results on Apr 9. Affymetrix’s expected
revenues for the quarter are $78 million, which is significantly
lower than the Zacks Consensus Estimate of $83 million. Further,
the company’s current secured debt stands at $70 million.
Following the release of the dismal preliminary results, the Zacks
Consensus Estimate for 2013 has gone down significantly by 37.5% to
5 cents per share in the last 7 days. The Zacks Consensus Estimate
for 2014 has also declined (down 7.1% to 13 cents per share) for
the same period. With the Zacks Consensus Estimates for both 2013
and 2014 going down, the company now has a Zacks Rank #5 (Strong
Sell).
Cause of Concern
Affymetrix is posed with intense competition across its core
markets and is exposed to tight global academic spending
environment, which leads us to tread with caution. Weak gene
expression array sales, especially in Japan, continue to weigh on
the top line. This offset healthy revenues from genotyping and
cytogenetics products, and moderate contribution from
eBioscience.
The company also needs to leverage its debt level in an effort to
strengthen its balance sheet. Given the massive pressure on the
business, achieving its restructuring target appears bleak. The
current Zacks Consensus Estimate for earnings per share for the
first quarter of fiscal 2013 is nil, which declined 1 cent in the
last 7 days.
Other Stocks to Consider
While we prefer to avoid Affymetrix until we see signs of
improvement in the company’s performance, other companies like
Osiris Therapeutics (OSIR), Cleveland
BioLabs (CBLI) and Athersys (ATHX), all
carrying a Zacks Rank #1 (Strong Buy), are expected to do well in
the Medical-Biomed/Gene industry.
AFFYMETRIX INC (AFFX): Free Stock Analysis Report
ATHERSYS INC (ATHX): Free Stock Analysis Report
CLEVELAND BIOLB (CBLI): Free Stock Analysis Report
OSIRIS THERAPTC (OSIR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Affymetrix (NASDAQ:AFFX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Affymetrix (NASDAQ:AFFX)
Historical Stock Chart
From Jul 2023 to Jul 2024