Why QuidelOrtho Stock Is Up 10% Today

Sometimes all a stock needs to have a good day on Wall Street is a positive note from one of the analysts who follow it. This dynamic was in evidence on Thursday with QuidelOrtho (QDEL 10.26%)when a forecaster’s recommendation upgrade fueled the in vitro diagnostic healthcare company’s stock to a more than 10% gain. That made him very performant, as well S&P 500 the index fell 0.3% on Thursday.

A new bull arrives

Craig-Hallum’s Bill Bonello was the fresh QuidelOrtho bull of the day. The analyst now feels the stock is a buy, with an upside from his previous hold rating. Bonello substantially raised his price target on the stock to $57 from a previous target of $40.

The changes stem from the analyst’s belief that QuidelOrtho has vast and untapped potential to boost its fundamentals. Bonello went so far as to write in the company’s most recent analyst note that it should be able to grow revenue at mid- to high-single-digit percentage rates through 2027. Better yet, in his view, it could to develop their earnings before. interest, tax, depreciation and amortization (EBITDA) margins in the mid-high 20% range.

“With comparable companies trading at 12 to 14 times annualized EBITDA, it’s conceivable that QDEL shares could reach $100 or more in two years,” he wrote.

Background concerns

On such a basis, QuidelOrtho appears to be undervalued. However, the company has posted net losses in four of its most recent five reported quarters, a trend that is sure to keep some investors away. He might have to book some lucrative frames to regain the confidence of the market.