Azenta (AZTA) To Report Earnings Tomorrow: Here Is What To Expect

What Happened?

Shares of life sciences company Azenta jumped 7.3% in the afternoon session after Evercore ISI Group upgraded the company's rating to "Outperform" from "In-Line" and raised its price target. 

The firm's analyst, Vijay Kumar, increased the price target on the stock to $50.00 from a previous target of $34.00. This represented a substantial change of over 47%. Such a significant upgrade and price target hike from a financial analyst often signals strong confidence in a company's future prospects, which can attract investor interest and drive up the share price.

What Is The Market Telling Us

Azenta’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock dropped 16.3% on the news that the company announced mixed third-quarter financial results, where a failure to meet revenue targets overshadowed a profit beat. 

The company disclosed revenue of approximately $144 million, which fell short of analyst projections. This result was flat compared to the same period last year and reflected a 2% organic decline. The shortfall stemmed from weakness in its Sample Management Solutions division, where revenue dropped by 4%. In contrast, Azenta posted adjusted earnings per share of $0.19, which exceeded expectations. Despite the disappointing sales figures, the company maintained its financial guidance for the full fiscal year, but investors focused on the revenue miss.

Azenta is up 6.9% since the beginning of the year, but at $35.70 per share, it is still trading 34.8% below its 52-week high of $54.75 from January 2025. Investors who bought $1,000 worth of Azenta’s shares 5 years ago would now be looking at an investment worth $529.28.

Azenta trades at $34.56 and has moved in lockstep with the market. Its shares have returned 12.3% over the last six months while the S&P 500 has gained 11.7%.

Why Do We Think Azenta Will Underperform?

We're cautious about Azenta. Here are three reasons you should be careful with AZTA and a stock we'd rather own.

1. Revenue Spiraling Downwards

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Azenta’s demand was weak and its revenue declined by 4.8% per year. This was below our standards and is a sign of poor business quality.

2. EPS Trending Down

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Sadly for Azenta, its EPS declined by 18.8% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

3. Cash Burn Ignites Concerns

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

While Azenta’s free cash flow broke even this quarter, the broader story hasn’t been so clean. Azenta’s demanding reinvestments have consumed many resources over the last five years, contributing to an average free cash flow margin of negative 14.2%. This means it lit $14.20 of cash on fire for every $100 in revenue.

Final Judgment

Azenta doesn’t pass our quality test. That said, the stock currently trades at 44× forward P/E (or $34.56 per share). This valuation tells us a lot of optimism is priced in - you can find more timely opportunities elsewhere. Let us point you toward a top digital advertising platform riding the creator economy.