A month has gone by since the last earnings report for Revvity (RVTY). Shares have added about 2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Revvity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
RVTY Q1 Earnings Beat Estimates on Organic Growth & Strong Execution
Revvity delivered first-quarter 2026 adjusted earnings of $1.06 per share, up 5.0% year over year. The bottom line beat the Zacks Consensus Estimate of $1.02 by 3.9%. Quarterly revenues of $711.1 million increased 7.0% from the year-ago period and topped the consensus mark of $705.2 million by 0.8%.
Strong performance across the portfolio helped results beat expectations, with the company reporting 3% organic revenue growth for the quarter and pointing to improving signals in key end markets.
RVTY’s Segment Mix Keeps Momentum Broad-Based
RVTY’s growth was supported by contributions from both operating segments. Life Sciences revenues totaled $361.8 million, reflecting year-over-year expansion led by demand in pharma/biotech and academic/government markets.
Diagnostics revenues increased to $349.3 million, aided by strength in reproductive health. The company stated better diagnostic trends outside of China, which was partially offset by softer dynamics tied to its China Immunodiagnostics footprint.
Investment Spending and Product Mix Weigh on Revvity Margins
Revvity reported an adjusted operating margin of 23.6% in the quarter, down 200 basis points year over year. The company attributed the margin pressure to a combination of factors, including ongoing investments, an unfavorable product mix, and the impact of an extra week in the reporting period.
Adjusted gross margin was 59.5%, down 220 basis points from the prior-year quarter’s level. Below the operating line, adjusted net interest and other expense totaled $23 million, while the adjusted tax rate was 18.3%, aiding overall adjusted profitability despite the margin contraction.
Selling, general and administrative expenses totaled $253.9 million, up 1.7% year over year. Research and development expenses amounted to $57.9 million, up 8% from the year-ago quarter’s reported number.
RVTY’s Cash Generation Stays Strong Despite Outflows
The company exited the first quarter of 2026 with cash and cash equivalents of $860.3 million compared with $919.9 million at the end of the prior quarter.
RVTY generated $115.2 million of net cash provided by operating activities in the quarter compared with $128.2 million in the year-ago period. After capital expenditures of $19.8 million and proceeds from capital disposals, free cash flow was reported at $115 million, with year-to-date free cash flow equal to 97% of adjusted net income.
The quarter also included meaningful shareholder returns. The company repurchased $86.5 million of common stock and paid $7.8 million in dividends. Revvity ended the period with $860.3 million in cash and cash equivalents, while long-term debt amounted to $2.63 billion.
Revvity’s China ImmunoDx Divestiture Reshapes the Lens
A key strategic development was the decision to divest its Immunodiagnostics business in China. Management noted that this unit accounted for roughly 6% of total company revenues in 2025 and confirmed that it has entered into a letter of intent with a prospective buyer, with a definitive agreement expected in the second quarter of 2026.
The divestiture is anticipated to be closed in 2027, subject to necessary regulatory approvals. Reflecting this transition, the company reported first-quarter results on both a reported and pro forma basis, with pro forma revenues of $686.9 million and pro forma adjusted earnings of $1.04 per share.
RVTY Updates Outlook on a Pro Forma Basis
RVTY updated full-year 2026 guidance on a pro forma basis that excludes the China Immunodiagnostics business. The company expects total revenues of $2.81-$2.84 billion, implying 3-4% pro forma organic revenue growth, with foreign exchange expected to add about 0.5% and M&A contributing roughly 0.75%.
Pro forma adjusted earnings are projected in the $5.20-$5.30 per share band, supported by an expected adjusted operating margin of 28.4%. Additional assumptions include adjusted net interest expense and other of about $90 million, an adjusted tax rate near 18% and an average diluted share count of roughly 112 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.22% due to these changes.
VGM Scores
At this time, Revvity has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Revvity has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Revvity belongs to the Zacks Medical Services industry. Another stock from the same industry, Avantor, Inc. (AVTR), has gained 7.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Avantor reported revenues of $1.58 billion in the last reported quarter, representing no change year over year. EPS of $0.17 for the same period compares with $0.23 a year ago.
For the current quarter, Avantor is expected to post earnings of $0.19 per share, indicating a change of -20.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Avantor has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).