A month has gone by since the last earnings report for Techne (TECH). Shares have lost about 15.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Techne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Bio-Techne Tops Q2 Earnings and Revenue Estimates

Bio-Techne reported second-quarter fiscal 2025 adjusted earnings per share of 42 cents, which exceeded the Zacks Consensus Estimate by 10.5%. The bottom line improved from the year-ago figure of 40 cents.

The quarter's adjustments eliminated the impact of certain one-time items, including amortization of intangibles, amortization of Wilson Wolf intangible assets and acquired inventory and restructuring and restructuring-related costs among others.  

GAAP earnings per share was 22 cents compared with 17 cents in the prior-year quarter.

Q2 Revenues in Detail

Bio-Techne registered net sales of $297.0 million, up 9% year over year on a reported basis and 9% on an organic basis. The figure also topped the Zacks Consensus Estimate by 4.1%.

Quarter in Details

The company reports under two business segments — Protein Sciences and Diagnostics and Genomics.

Within Protein Sciences, Bio-Techne recorded revenues of $211.6 million, up 7% year over year (up 8% organically). As of Dec. 31, 2023, a business within the Protein Sciences Segment met the criteria as held-for-sale. This business has been excluded from the segment's fiscal 2025 operating results. This exclusion reduced total sales by 1%.

Within Diagnostics and Genomics, sales improved 12% to $84.1 million (up 12% organically as well) in the fiscal second quarter.

Margin Trend

Bio-Techne’s gross profit edged up 9.8% to $193.9 million. Gross margin expanded 50 basis points (bps) to 65.3% despite a 7.4% rise in cost of sales.

Selling, general and administrative expenses escalated 5% to $121.4 million. Research and development expenses totaled $25 million, up 9.2% year over year. Total operating expenses were $146.5 million, up 5.7% from the prior-year quarter’s level.

Operating margin expanded a huge 202 bps to 16% in the reported quarter.

Capital Structure

Bio-Techne exited the fiscal second quarter with cash and equivalents and short-term available-for-sale investments of $177.5 million compared with $152.9 million at the end of the first quarter of fiscal 2025. Long-term debt obligations totaled $300 million at the end of the reported quarter compared with $319 million at the end of the fiscal first quarter.

Cumulative net cash provided by operating activities was $148.2 million at the end of the second quarter compared with $142.5 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Techne has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Techne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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