I think that 2013 will be good for companies like LMNX, and I hope that includes LMNX! The company is expensive on the surface but has unique technology and solid top-line growth. My target assumes 5X sales, which really requires closer to 20% growth to entice people to pay that much (it's been closer to 15%) but keep in mind that there is a huge call option here on the BioThreat program to detect anthrax. I don't think anyone is too focused there now.
This quarter was nice, with a small beat on the top-line and a decent one on EPS. There have been a lot of moving parts here, including a shift towards self-distribution for a portion of their molecular diagnostics business. I think that is the main reason for the beat, which leaves me a little cautious on that front, but there are a lot of things going on, including a new test that was just approved for gastrointestinal disorders, where a rapid diagnosis is important. The strong flu season has helped them too.
Long story short, no reason to fade necessarily, but this wasn't a breakout quarter. I thought the guidance was decent - $225mm sales at the mid-point. I may trim the stock if it approaches 20, but my target of 28.50 suggests that this remain a core holding.
Comments