QuidelOrtho 15% Drop is Unwarranted, Buy on Weakness!

RBC Capital analysts provided their thoughts on the sharp decline in QuidelOrtho Corporation (NASDAQ:QDEL) shares in the last 30 minutes of trading on Tuesday, viewing it as unwarranted.

Shares closed more than 15% on Tuesday following the Analyst Day, where the company posted a slide showing 2023-2025 revenue growth and EBITDA margin targets, and RBC Capital believes there was some confusion on how to interpret these targets - especially since the slide was presented about 30 minutes prior to the close of the trading day.

This is the first time the combined company has given 2025 targets, but the analysts believe the market is comparing current targets of 6-9% revenue CAGR (2023-2025) and 27-29% EBITDA margins in 2025 to the financials that were presented in the S4 at the start of the merger. The analysts highlighted that S4 financials are not 'guidance' and Street was already well below the numbers in the S4.