Is Bio-Techne Stock the Right Pick for Your Portfolio Now?

Bio-Techne’s TECH GMP reagents, including GMP proteins and small molecules, remain a cornerstone of its cell therapy offering. Acquisitions have continued to play an important role in the company’s efforts to expand its portfolio, as well as enter adjacent markets. Further, the company has begun to pursue clinical diagnostic opportunities on Ella, its automated multiplexing immunoassay instrument platform. However, ongoing macroeconomic volatilities and a challenging research landscape may adversely weigh on the company’s operations.

In the past year, shares of this Zacks Rank #3 (Hold) company have declined 38.1%, underperforming the industry’s 15.3% fall. The S&P 500 composite grew 13.1% in the same time frame.

The renowned life sciences company has a market capitalization of $7.63 billion. TECH’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, delivering an average surprise of 6.7%. 

Let’s delve deeper.

Tailwinds for TECH

Cell and Gene Therapy a Major Growth Component: The Cell and Gene Therapy vertical is led by the company’s high-quality GMP protein products. In the third quarter of fiscal 2025, the GMP reagents business saw high single-digit revenue growth and continued strong customer engagement, with over 500 customers across all stages of cell therapy development. On a trailing 12-month basis, the GMP reagents business grew at just over 13%, reflecting the variability of large, infrequent orders from customers in late-stage clinical trials.

In China, despite funding challenges, cell and gene therapy solutions remain resilient. The business is also expected to benefit from increasing adoption of organoid solutions as a result of the FDA's recent emphasis on reducing animal testing in drug development, which could further accelerate demand for GMP reagents as these models move into the clinic.

Expansion Through Strategic Acquisitions: In recent times, the company has made multiple acquisitions that have expanded the product offerings and geographic footprint of both operating segments, such as the acquisition of Lunaphore in fiscal 2024. The company also completed a 19.9% investment in Wilson Wolf in fiscal 2023 and currently plans to acquire the remaining ownership in Wilson Wolf by the end of calendar year 2027.

In September 2024, the company announced the launch of its ProPak GMP Cytokines, which are optimized for use with the Wilson WolfG-Rex bioreactor. Subsequent to fiscal 2024, Bio-Techne made an investment in Spear Bio, a leader in the development and manufacturing of ultra-sensitive immunoassays capable of measuring protein biomarkers at an attomolar level from sub-microliter sample volume.

Ella Garners Promising Opportunities: Following the recent ISO 13485 certification, the company has started to successfully pursue clinical diagnostic opportunities on the Ella automated multiplexing immunoassay instrument platform. This has opened up a large potential end market for this highly sensitive, fast and easy-to-use multiplexing immunoassay instrument. In this regard, the partnership with Novomol-Dx should be mentioned. Its Bio-Marker Pathfinder, or BMPkit, utilizes Ella, its consumable, as well as Bio-Techne’s reagents as the basis for its point-of-care test. Novomol-Dx will initially launch the BMP kit in India, which has great market potential.

According to Bio-Techne, Ella is quickly becoming the go-to platform for cell and gene therapy customers for viral titer and release testing. It is also seeing rapid adoption among CROs looking for high reproducibility paired with high sensitivity in an easy-to-use, fully automated immunoassay platform.

Factors Weighing on TECH

Choppy Macro Environment: The challenging macroeconomic scenario is driving the higher-than-anticipated rise in raw materials and labor costs. In addition, the escalation of global tariffs, particularly those imposed by China on U.S.-exported proteomic analytical instruments, has introduced new operational headwinds and temporary pressure on margins despite Bio-Techne’s mitigation efforts. In the third quarter of fiscal 2025, the company's cost of sales rose 2.8% while selling, general and administrative expenses increased 35.2% year over year.

Challenging Funding Scenario: Reductions in customer projects, extended sales cycles and overall spending constraints across the industry are resulting in production-related hazards for the company. These challenges are more prominent in China, where the instrument business is facing severe setbacks. The proposed 40% cut to NIH funding in the Trump administration’s fiscal 2026 budget has introduced further uncertainty, although management views the likelihood of such cuts materializing as low and the long-term impact as immaterial. Although the company anticipates a gradual recovery, the situation might continue to remain drab in the calendar year 2025.

TECH Stock Estimate Trend

In the past 30 days, the Zacks Consensus Estimate for the company’s fiscal 2025 earnings has moved down a cent to $1.88.

The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $1.22 billion, suggesting a 5.2% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Prestige Consumer Healthcare PBH and Inspire Medical Systems INSP.

Phibro Animal Health has an estimated long-term earnings growth rate of 26% compared with the industry’s 15.7%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 30.6%. Its shares have rallied 37.7% compared with the industry’s 10.7% growth in the past year.

PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Prestige Consumer Healthcare, currently carrying a Zacks Rank #2 (Buy), has an earnings yield of 5.6% compared with the industry’s 0.6% yield. Shares of the company have rallied 34.3% compared with the industry’s 10.6% growth. PBH’s earnings surpassed estimates in three of the trailing four quarters and matched on one occasion, the average surprise being 2.8%.

Inspire Medical Systems, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 28.9% compared with the industry’s 21.2%. Shares of the company have fallen 9.2% against the industry’s 19.9% growth. INSP’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 356.9%.

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

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