Entities affiliated with the Carlyle Group (NASDAQ:CG) Inc. have sold a significant portion of their holdings in QuidelOrtho Corp (NASDAQ:QDEL), according to recent filings. On July 30 and 31, 2024, the entities sold a total of $12,432,849 worth of common stock in the in vitro diagnostics company. The shares were sold at prices ranging from $38.674 to $40.0173.
The transactions were carried out under a Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined plan to sell company stocks. The plan was adopted on May 12, 2024, indicating that the sales were pre-planned and not based on any immediate market events or inside information.
The sales included multiple transactions at varying prices within the stated ranges. The largest single transaction involved the sale of 140,207 shares at an average price of $39.7411, with individual prices ranging from $39.00 to $39.9999. Another transaction on the same day saw the sale of 8,178 shares at an average price of $40.0173, with prices between $40.00 and $40.09. The following day, 119,482 shares were sold at an average price of $39.2708, with a price range of $39.00 to $39.80.
After these transactions, the Carlyle-affiliated entities continue to hold a significant number of QuidelOrtho shares, with the post-transaction amounts indicating millions of shares still under their indirect ownership.
Investors often watch the buying and selling activities of major shareholders and company insiders to gain insights into their perspective on the company's value and prospects. The disclosed sales by Carlyle Group entities represent a substantial change in their investment in QuidelOrtho, and this information can be valuable to both current and potential investors.
In other recent news, QuidelOrtho reported Q2 revenues of $637 million and adjusted EBITDA of $90 million, meeting market expectations. The company noted a decline in adjusted gross profit margin, largely due to a decrease in COVID-19 product sales. However, QuidelOrtho has executed $100 million in annualized cost savings and expects to realize $50 million more in H2 2024.
The company also plans to launch the Savanna instrument and prepare for clinical trials for various diagnostic panels, expected in 2025. QuidelOrtho aims for an adjusted EBITDA margin in the mid to high 20% range within the next 2-3 years and anticipates improved cash flow and a stable consolidated leverage ratio by year-end.
Despite the drop in COVID-19 product sales, QuidelOrtho maintained solid performance across all geographies, with a strong contribution from flu testing on the Sofia platform. The company is also planning two facility sales to generate cash and reduce operating costs. These are some of the recent developments in the company's strategic growth plan.
InvestingPro Insights
QuidelOrtho Corp (NASDAQ:QDEL) has recently been under the spotlight following the Carlyle Group Inc.'s significant divestment. As investors digest the implications of these sales, certain metrics and InvestingPro Tips can offer additional insights into the company's financial health and future expectations.
InvestingPro Data reveals that QuidelOrtho has a market capitalization of approximately $2.82 billion. Despite a challenging period, the company has maintained a solid gross profit margin of 48.13% over the last twelve months as of Q1 2024. However, revenue has seen a downturn, with a 7.95% decrease during the same period, reflecting potential headwinds in the in vitro diagnostics market.
Two InvestingPro Tips highlight critical aspects for investors to consider. Firstly, QuidelOrtho operates with a significant debt burden, which could impact its financial flexibility. Secondly, the company is trading at a high EBIT valuation multiple, suggesting that its current earnings before interest and taxes are highly valued by the market relative to its share price.
For those looking to delve deeper into QuidelOrtho's financials and forecasts, InvestingPro offers additional tips, including insights on shareholder yield and profitability predictions for the year. With 5 analysts having revised their earnings downwards for the upcoming period, it's clear that close monitoring of QuidelOrtho's performance will be crucial. For more comprehensive analysis, there are a total of 9 InvestingPro Tips available, which can be accessed for QuidelOrtho on the InvestingPro platform.
The recent transactions by Carlyle Group entities may signal various strategic moves, but with QuidelOrtho's strong return over the last month, investors might find reasons for both caution and optimism. The company's next earnings date is set for October 30, 2024, which will be a key event for shareholders and potential investors to gain further clarity on the company's trajectory.
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