Bio-Rad Earnings: In-Line Results, and Shares Undervalued

Wide-moat Bio-Rad’s third-quarter results were in line with our expectations. Revenue of $650 million grew 3% year over year, driven primarily by the clinical diagnostics segment. Management reiterated its expectation that full-year revenue will decline 2.5%-4% on a currency-neutral basis, but it now estimates that non-GAAP operating margin will be 12.75%-13.25%, which is 50 basis points better at the midpoint compared with previous guidance of 12%-13%. We maintain our $430 fair value estimate and view the shares as undervalued. Despite a lackluster 2024, we think Bio-Rad can return to growth in 2025 and improve its operating profit margins.