Shares of life sciences solutions provider Azenta, Inc. (AZTA) have declined 16% so far this year. The company provides cold-chain sample management and genomic services across diverse areas. Azenta’s recent first-quarter showing was ahead of the Street’s estimates on both top-line and bottom-line fronts.
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While revenue declined 44% year-over-year to $139.6 million, the figure was better than analysts’ expectations by $4.2 million. Earnings per share at $0.12 outperformed estimates by $0.04.
On February 1, Azenta closed the sale of its semiconductor business to Thomas H. Lee Partners for a cash consideration of $3 billion. As a result, AZTA is now a standalone life sciences company. In its continuing operations, the company saw a 10% growth in Life Sciences products and a 24% growth in Life Sciences Services during Q1.
Looking ahead, for Q2, Azenta estimates its top-line to be between $137 million and $147 million. Earnings per share are expected to be in the range of $0.07 to $0.15.
With these developments in mind, let us take a look at the changes in Azenta’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Azenta’s top risk category is Finance & Corporate, contributing 9 of the total 35 risks identified for the stock, compared to a sector average of 16 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Finance & Corporate risk category.
Azenta highlighted that it received substantial cash upon the sale of its semiconductor automation business. If the company becomes a focus of stockholder activism due to this transaction or for any other reason, then it may be constrained in its capital deployment opportunities and the types of investments available to it.
Further, such a development may also lead to higher expenses, impact on stock price, litigation, and diverting management’s attention and the company’s resources.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have increased holdings in Azenta by 17.4 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock based on activities of 3 hedge funds. Notably, Ken Fisher’s Fisher Asset Management has a holding in Azenta worth about $91.8 million.
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