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What: Shares of molecular diagnostics company Cepheid
So what: Cepheid warned after the bell last night that, due to parts problems with its Xpert family of diagnostic tests, about $5 million in product that would have shipped in the third-quarter will be pushed back into the fourth-quarter. As such, Cepheid now expects to report revenue in the range of $79 million to $81 million, versus Wall Street’s projections for $84 million in sales. Cepheid was able to keep its full-year sales forecast intact.
Now what: Capacity is always a concern, and it looks like Cepheid got caught with its hand in the cookie jar while attempting to upgrade to higher production capacity. The prospect for the diagnostics market is bright, as new technologies in the health-care sector are making it cheaper and more feasible than ever to utilize Cepheid’s products; but, at 95 times forward earnings, and almost 11 times book value, I’m not as excited about Cepheid. Until it can put some meat on its bones (i.e. earn a sizable profit), I’m just not going to be a fan.
Craving more input? Start by adding Cepheid to your free and personalized Watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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