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

Revvity, Inc. RVTY is well-positioned for growth in the coming quarters, thanks to its strong product portfolio. The company benefits from a strong diagnostics franchise driven by newborn screening, TB testing, and specialty immunodiagnostics, complemented by rapid expansion of its high-margin Signals Software business. However, near-term challenges persist, including China’s reimbursement reforms pressuring immunodiagnostics, weak academic/government demand limiting instrumentation growth, and exposure to macroeconomic and FX volatility.

This Zacks Rank #3 (Hold) company’s shares have gained 16.4% in the past six months compared with the industry’s 17.9% growth. The S&P 500 has increased 12.7% during the same time frame.

The renowned provider of health science solutions has a market capitalization of $12.75 billion. It projects 6.2% growth over the next five years and expects to witness continued improvement in its business going further. Revvity’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 4.16%.

Let’s delve deeper.

Upsides

Focus on AI: We are upbeat about the trend of healthcare companies using AI for quite some time now. Management at Revvity introduced PKeye Workflow Monitor, a cloud-based platform allowing laboratory personnel to remotely manage and monitor the company’s instruments and workflows in real time.

Revvity also introduced Signals Research Suite, a complete cloud-based solution used by Amazon Web Services.

Strong Diagnostics Franchise With Resilient Growth: Revvity’s Diagnostics business has emerged as a cornerstone of stability and growth, supported by durable demand drivers that are less exposed to cyclical pharma spending. In the past few quarters, diagnostics has grown organically, driven by newborn screening programs and specialty diagnostics. Partnerships, such as the expanded Genomics England initiative, targeting 100,000 newborns for over 200 rare genetic conditions, reinforce RVTY’s leadership in reproductive and genomic health. The recent FDA clearance of the automated T-SPOT TB testing platform provides a significant productivity advantage for labs, with the U.S. market representing over half of global TB testing volumes. Additionally, the launch of EUROIMMUN’s IDS i20 platform enables multi-specialty immunodiagnostic testing automation, positioning Revvity at the forefront of lab modernization. These initiatives, combined with regulatory approvals and global collaborations, provide RVTY with recurring, high-margin revenue streams and defensiveness against macro volatility.

Rapid Expansion of Signals Software – A High-Margin Growth Engine: Signals Software, now nearly 8% of company revenues, delivered robust double-digit organic growth in the first half of 2025.

This unit is strategically positioned at the intersection of life sciences and data analytics, offering AI-driven platforms like Signals One, Signals Clinical and Signals Synergy. These products streamline workflows, enhance R&D productivity, and deepen enterprise-level integration with pharma and biotech customers.

Strong order momentum in the second quarter of 2025 set new records, indicating accelerating adoption. Moreover, court rulings in RVTY’s favor ensure continuity for Spotfire customers, mitigating competitive risks. As pharma R&D increasingly digitizes, Signals offers scalable, high-margin growth that complements RVTY’s core reagent and diagnostic businesses, strengthening its long-term competitive edge.

Downsides

Weak Academic and Government Demand: RVTY’s Life Sciences instrumentation remains exposed to cyclical funding environments. The first half of 2025 saw low single-digit declines in academic/government revenues globally, with particular softness in the United States. This weakness disproportionately affects high-ticket instrumentation sales, limiting operating leverage and offsetting gains in consumables. Given ongoing funding constraints and macro uncertainty, recovery in this end-market may be slow. Persistent softness here could cap RVTY’s overall growth rate, especially if not fully offset by diagnostics and software strength.

Macro Volatility and FX Risks: Management has repeatedly emphasized the challenging macro backdrop — tariff fluctuations, FX swings and global economic uncertainty. In 2025, RVTY navigated tariff-related cost pressures by adjusting inventories, but such mitigation measures compress free cash flow in the short term. With nearly 50% of revenues generated outside the United States, currency volatility remains a recurring headwind. Additionally, while pharma and biotech demand is stabilizing, broader macro risks could again disrupt spending cycles. These uncertainties create variability in quarterly results and may temper near-term investor confidence despite long-term growth prospects.

Revvity Inc. Price

Revvity Inc. price | Revvity Inc. Quote

Estimate Trend

Revvity has been witnessing a stable estimate revision trend for 2026. Over the past 30 days, the Zacks Consensus Estimate for earnings per share (EPS) has remained unchanged at $5.31.

The Zacks Consensus Estimate for first-quarter 2026 revenues is pegged at $680 million, indicating a 2.3% improvement from the year-ago reported number. The Zacks Consensus Estimate for EPS is pinned at $1.11, implying a year-over-year gain of 9.9%.

Stocks to Consider

Some better-ranked stocks in the broader medical space are IDEXX Laboratories IDXX, Boston Scientific BSX and STERIS STE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for IDXX’s 2025 earnings per share (EPS) have remained constant at $12.93 in the past 30 days. Shares of the company have risen 12.6% in the past year compared with the industry’s 11.1% growth. IDXX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.1%. In the last reported quarter, it delivered an earnings surprise of 8.3%.  

Boston Scientific shares have gained 2.9% in the past year. Estimates for the company’s 2025 EPS have remained constant at $3.04 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.4%. In the last reported quarter, it posted an earnings surprise of 5.6%.

STERIS shares have risen 9.1% in the past year. Estimates for the company’s 2025 EPS have increased 2 cents to $10.23 in the past 30 days. STE’s earnings topped estimates in three of the trailing four quarters and matched on one occasion, delivering an average surprise of 2.6%. In the last reported quarter, it posted an earnings surprise of 2.6%.

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

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