QuidelOrtho (QDEL): Is the Current Share Price Reflecting Fair Value?

If you have been following QuidelOrtho (QDEL) lately, you might be wondering what is behind the latest movements in the share price. While there has not been a major single event shaking up headlines this week, the steady day-to-day uptick has caught the attention of investors who are trying to judge whether this is a sign of things to come or just a temporary blip. When a stock moves without a clear catalyst, it can raise just as many questions for investors as a blockbuster announcement. Looking back over the past year, QuidelOrtho shares are actually down over 36%, reflecting persistent skepticism despite solid revenue growth and an impressive jump in net income on an annual basis. The stock has bounced nearly 14% higher this past month alone, which may point to a shift in sentiment and a little momentum returning to the story. Still, three- and five-year returns have been sharply negative, so investors are right to ask whether this rebound is the start of a longer-term turnaround or something less durable. So is QuidelOrtho being unfairly overlooked at these prices, or is the market already pricing in all of the potential recovery?

Most Popular Narrative: 32% Undervalued

According to the most widely followed narrative, QuidelOrtho is currently trading at a significant discount to its estimated fair value, signaling that the market may be underestimating the company's future prospects.

Expansion into international markets such as Latin America, Asia Pacific, and underpenetrated regions like China, where differentiated technology, low market share, and a large runway for immunoassay growth exist, positions QuidelOrtho to capture increased demand stemming from global health system focus on early detection and public health surveillance, which could drive topline revenue growth.

Can a global growth push and new diagnostic innovations justify this valuation gap? The most-followed narrative depends on an ambitious turnaround, with aggressive targets for both profitability and revenue. Want the full story on which financial forecasts and market shifts could power this recovery? The detailed assumptions may surprise you.

Result: Fair Value of $43.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent post-pandemic revenue declines and the winding down of certain product lines could threaten both earnings momentum and future profitability for QuidelOrtho.

Find out about the key risks to this QuidelOrtho narrative.

Another View: What Does the SWS DCF Model Say?

While sales-based metrics paint QuidelOrtho as a bargain, the SWS DCF model also indicates the shares are undervalued. However, do future cash flows support long-term optimism, or is the story more complicated?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out QuidelOrtho for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own QuidelOrtho Narrative

If you see things differently or want to dive into the numbers on your own terms, you can quickly craft your own perspective in just a few minutes: Do it your way.

A great starting point for your QuidelOrtho research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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