What happened
Shares of diversified life sciences company Azenta (NASDAQ:AZTA) were down by a noteworthy 15.5% as of 10:07 a.m. ET Thursday morning. The healthcare company's shares were pulling back after its preliminary 2022 third-quarter results missed Wall Street's consensus revenue figure.
Specifically, Azenta's initial third-quarter revenue forecast of $133 million is $11 million less than analysts' average figure for the three-month period. The biopharma's shares are also under pressure from the broad-based downward trend across the healthcare sector this morning.
Image source: Getty Images.
So what
Thanks to hurricane-force headwinds emanating mostly from the financial sector, healthcare stocks were having a hard time in general this morning. Speaking to this point, the bellwether SPDR S&P Biotech ETF is down by nearly 3% at the time of this writing. Azenta, in short, couldn't have picked a worse day to release an underwhelming earnings report.
What went wrong in the quarter? While Azenta's services segment and sample-repository solutions unit both saw strong revenue growth for the quarter relative to a year ago, the company's genomic services unit posted an anemic 1% uptick in year-over-year revenue growth, reflecting lower-than-expected demand. On the bright side, Azenta did say that year-over-year organic growth should come in at a healthy 6% when it officially reports third-quarter earnings next month.
Now what
Is today's dip a buying opportunity? Unfortunately, Azenta's stock has a premium valuation in a market that is favoring classic value plays. Underscoring this point, the company's shares are trading at over seven times 2023 projected sales right now. Bargain hunters might want to look elsewhere for more compelling deals.
