Revvity, Inc. RVTY is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by its solid second-quarter 2024 performance and focus on artificial intelligence (AI), is expected to contribute further. Headwinds resulting from foreign exchange volatility and integration risks are major downsides.

This Zacks Rank #3 (Hold) company’s shares have gained 13.4% year to date compared with 0.7% growth of the industry. The S&P 500 has increased 20.8% during the same time frame.

The renowned provider of health science solutions has a market capitalization of $15.29 billion. It projects 7.6% growth for the next five years and expects to witness continued improvement in its business going further. Revvity’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 5.02%.

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Factors Favoring RVTY’s Growth

Focus on AI: We are upbeat about the use of AI by healthcare companies which has been the trend for quite some time now. Management at Revvity introduced PKeye Workflow Monitor, a cloud-based platform that allows laboratory personnel to manage and monitor the company’s instruments and workflows in real-time, remotely.

Revvity also introduced Signals Research Suite, a complete cloud-based solution used by Amazon Web Services.

Promising Product Portfolio: We are optimistic about Revvity’s portfolio, which offers an extensive range of software and scientific informatics solutions to automatically and scalably convert data into meaningful insights. Revvity Signals Software, the company's software and informatics segment, witnessed rapid growth in the first half of 2024. Based on new products, this trend is likely to continue in the second half of the year. RVTY offered three new SaaS-based solutions during the quarter. Among these are Signals Clinical and Signals Synergy, which ought to facilitate the business's entry into new markets.

Revvity also announced the launch of its next-generation sequencing solution for Newborn Screening during the first quarter. This launch is likely to help the company maintain its market leadership position in Newborn Screening. Moreover, the expansion of GMP reagent capacity is helping RVTY launch several new GMP recombinant proteins, creating potential for additional revenues.

Robust Q2 Results: RVTY’s diagnostic businesses have continued to remain strong during the quarter. The immunodiagnostics franchise, which is so far the largest category of the Diagnostics segment, grew in the low double-digits. Moreover, a rise in pharma and biotech spending is in the cards, which may boost sales in the second half of 2024. Meanwhile, ongoing cost containment efforts are likely to improve margins in the future.