Here's Why You Should Retain BRKR Stock in Your Portfolio Now

Bruker Corporation's BRKR growth is backed by strong sales within its X-Ray and Nano Analytics businesses. Within the PCI division, expanding customer demand for pre-clinical MRI systems is highly encouraging. Meanwhile, the impact of macroeconomic pressure and currency fluctuation is likely to hurt the company's operational results.

In the past year, this Zacks Rank #3 (Hold) company's shares have gained 10.4% compared with the industry's 27.5% growth and the S&P 500 composite's 34.9% gain.

This renowned medical device company has a market capitalization of $11.77 billion. It has a 2025 earnings growth rate of 17.6%, which is much higher than the industry's 13.8% growth rate. BRKR's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.1%.

Let's delve deeper.

Bruker's Key Upsides

Bright Prospects Within Nano Business Segment: The segment caters to a large set of customers, such as academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses that are involved in materials research and life science research analysis. The business is seeing robust revenue growth across its end markets, including academic, government, industrial and semiconductor metrology. 

During the first half of 2024, the company's advanced X-Ray and Nano Analytics businesses delivered strong sales, backed by Nano's robust revenue growth. Nano's strong growth is driven by the rising demand in academic and government markets. The Nanostring acquisition is expected to be both strategically and financially beneficial, promising a high return on investment for Bruker.

The Potential of Preclinical Imaging (PCI) Market: Per Grand View Research, the global PCI market was valued at $4.30 billion in 2023 and is likely to witness a CAGR of 4.6% up to 2030. Therefore, this translates into a golden opportunity for Bruker to expand its foothold in the PCI market and earn higher profits from this division.

Bruker offers advanced PCI solutions for a broad spectrum of application fields. Moreover, this division is experiencing increasing customer demand for higher-strength pre-clinical magnetic resonance imaging systems. Earlier this year, Bruker filled a critical gap in its PCI portfolio with the acquisition of Spectral Instruments Imaging LLC, a leader in preclinical in-vivo optical imaging systems.

Bruker's Key Downsides

Unfavorable Currency Movement: Bruker generates a substantial portion of its revenues in the international markets, primarily in Germany and other countries in the European Union, Switzerland and Japan.  As a result, currency fluctuations continue to result in foreign currency transaction losses for the company. In addition, currency fluctuations are likely to cause the price of Bruker's products to be less competitive than its principal competitors' offerings.

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Macroeconomic Factors: Present global economic challenges and uncertainties have made it harder for Bruker to manage operations and predict financial outcomes. Geopolitical conditions are impacting its operational results. In addition, supply-chain risks also persist. All these issues are leading to higher costs and expenditures for the company, impacting its profitability.

In the second quarter, Bruker's cost of revenues increased 21.6% from the same period in 2023. SG&A expenses surged 24.4%.

BRKR's Estimate Trend

The Zacks Consensus Estimate for Bruker's 2024 earnings per share remained unchanged at $2.61 for the past 30 days.

The consensus estimate for the company's 2024 revenues is pegged at $3.41 billion, indicating a 14.9% rise from the year-ago  number.

Key Picks

Some better-ranked stocks in the broader medical space are TransMedix Group TMDX, AxoGen AXGN and Phibro Animal Health PAHC.

TransMedix Group's earnings are expected to surge 255.8% in 2024. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%. Shares of the company have risen 173.5% in the past year compared with the industry's 22.4% growth. TMDX sports a Zacks Rank #1 (Strong Buy) at present.

AxoGen, carrying a Zacks Rank #2 (Buy) at present, has an earning yield of 94.1% compared with the industry's 12.3%. Shares of the company have risen 194.6% compared with the industry's 22.3% growth over the past year. AXGN's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.46%.

Phibro, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 21% for fiscal 2025 compared with the industry's 12.6%. In the past year, shares of PAHC have risen 72.7% compared with the industry's 25.2% growth. PAHC delivered a trailing four-quarter average earnings surprise of 4.10%.

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