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Should You Exit This Small-Cap Healthcare Stock – VIVO

Jan 07, 2022 | Team Kalkine
Should You Exit This Small-Cap Healthcare Stock – VIVO

Meridian Bioscience, Inc.

VIVO Details

Meridian Bioscience, Inc. (NASDAQ: VIVO) is a life sciences company that develops, manufactures, sells, and distributes diagnostic testing systems and kits, primarily for gastrointestinal and respiratory infectious diseases, elevated blood lead levels, and bulk antigens, antibodies, and bioresearch reagents used by other diagnostic manufacturers and researchers. Diagnostic and Life Sciences are the company's two operating segments.

Latest News:

  • FDA Approval:  On January 05, 2022, VIVO announced that its Curian Campy assay had been approved by the United States Food and Drug Administration (FDA). The Curian Campy assay detects a Campylobacter-specific antigen in a fast, qualitative fluorescence immunoassay.


  • CFO Retirement and Key Recruitment: On December 02, 2021, VIVO announced that its current Chief Financial Officer (CFO), Executive Vice President and Secretary Bryan Baldasare retired on December 31, 2021, after working for the firm since 2000. A hunt for his replacement is currently underway. Concurrently, VIVO has appointed Julie Smith as its Senior Vice President, Controller, effective December 6, 2021, and Principal Accounting Officer, effective January 1, 2022.

FY21 Results:

  • Double-Digit Growth in Sales: The company reported YoY growth of 25.32% in net revenues to USD 317.90 million in FY21 (ended September 30, 2021) compared to USD 253.67 million in FY20, owing to a 43.46% increase in Life Science revenues.
  • Growth in Bottomline: VIVO witnessed an increase in net earnings to USD 71.41 million in FY21 vs. USD 46.19 million in FY20.
  • Strong Balance Sheet: As of September 30, 2021, the company had cash & cash equivalents of USD 49.77 million and total debt of USD 60.0 million.

Key Risks:

  • Customer Concentration Risk: In FY21, VIVO's ten major Life Science customers accounted for 44% of Life Science segment revenues and 27% of consolidated revenues. As a result, losing any of its key customers could harm its bottom line.
  • Product Concentration Risk: In FY21, COVID-19-related products accounted for 59% of Life Science sector sales and 35% of consolidated revenues. As a result, any changes in the Covid-19 environment due to expanded global immunizations could be detrimental to the company's financials.


  • Revenue Estimate: As of November 12, 2021, VIVO forecasts its FY22 revenues to range between USD 285-300 million. It also expects its diagnostics division to generate USD 145-150 million, with the Life Science segment contributing USD 140-150 million.
  • Operating Margin and EPS Estimate: In FY22, VIVO expects an adjusted operating margin of 21 to 22%, with Adjusted Net EPS on a Diluted Basis in the range of USD 0.98 to 1.08, assuming 44.5 million outstanding shares.


Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.