Meridian Bioscience Checks All The Right Marks

It isn’t very often that you see a stock get positive signals across the board on, but that is exactly what we see on Meridian Bioscience (VIVO) at this time. The company has strong fundamentals, the stock is in an upward trend, the stock isn’t overvalued, and there is a sense of pessimism toward the stock.

Meridian is a life science company that develops, manufactures, distributes, and sells diagnostic test kits primarily for gastrointestinal and respiratory infectious diseases, and elevated blood lead levels worldwide. The company operates through Diagnostics and Life Science segments.

The current global health crisis has boosted Meridian’s earnings and revenue. The company reported fiscal first-quarter 2021 earnings on February 5. Earnings jumped 550% compared to Q1 2020. That is considerably better than the average EPS growth for the last three years which is 19%. Earnings are expected to grow by 58% for the year.

On the revenue side, Q1 showed a jump of 96% compared to the same period a year earlier and that also was much better than average annual growth rate. Over the last three years revenue has increased by an average of 8% per year. Revenue is expected to increase by 27.9% in 2021.

The only negative for Meridian is that growth isn’t expected to be as strong beyond 2021.

Meridian is Cheaper than Most Stocks Based on Almost Every Value Metric

Looking at the different metrics for valuing a stock, Meridian scores very well across the board. There were five in particular that stood out to me. The trailing P/E is lower than the average stock at 14.37 and the forward P/E is only 13.46. If you compare those figures to the sector, they are both more than 50% lower than the average.

The price-to-sales ratio is at 3.32 on a trailing basis and 3.06 on a forward basis. Once again, these figures are much lower than the average stock and much lower than the sector average. The price-to-book ratio is 3.58 and is also lower than the average, both overall and sector averages.

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