Has QuidelOrtho (QDEL) Become A Potential Opportunity After Its Sharp Share Price Slide

• If you are wondering whether QuidelOrtho is starting to look like a value opportunity or a value trap, its current share price means it is a stock where valuation really matters.
• The share price closed at US$21.93, with a 5.2% decline over 7 days, a 21.9% decline over 30 days, a 23.8% decline year to date and a 46.8% decline over the past year, while the 3-year and 5-year returns stand at a 74.8% decline and an 86.4% decline respectively.
• Recent news coverage has focused on QuidelOrtho's position in the healthcare sector and how investors are reassessing companies that were previously in the spotlight. This shift in attention helps frame the recent share price performance as part of a broader reset rather than an isolated move.
• On our valuation checks, QuidelOrtho scores 5 out of 6, and you can see the full breakdown in its valuation scorecard. We will unpack this using different valuation approaches before finishing with a way to assess value that goes beyond the usual models.

Find out why QuidelOrtho's -46.8% return over the last year is lagging behind its peers.

Approach 1: QuidelOrtho Discounted Cash Flow (DCF) Analysis

Approach 1: QuidelOrtho Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes forecasts of a company’s future cash flows and discounts them back to today using a required rate of return, giving an estimate of what the entire business could be worth right now.

For QuidelOrtho, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of $84.94 million, so the story here is very much about what future cash flows might look like rather than what the business is currently producing. Analysts provide free cash flow projections out to 2029, with Simply Wall St extrapolating further. By 2029, free cash flow is projected at $544 million, with intermediate annual projections between 2026 and 2035 ranging from $388 million to about $684.70 million before discounting.

When all those projected cash flows are discounted back, the DCF model arrives at an estimated intrinsic value of about $83.98 per share. Compared with the current share price of US$21.93, the model implies the stock is around 73.9% undervalued on this set of assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests QuidelOrtho is undervalued by 73.9%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for QuidelOrtho.

Approach 2: QuidelOrtho Price vs Sales

For companies where earnings are weak or volatile, the P/S ratio is often more useful than P/E because it anchors valuation to revenue rather than profit, which can swing around with one off items or investment cycles.

In general, higher growth expectations and lower perceived risk can justify a higher “normal” multiple, while slower growth or higher risk tend to align with a lower multiple that investors are willing to pay.

QuidelOrtho currently trades on a P/S ratio of 0.55x. That sits well below the Medical Equipment industry average P/S of 3.00x and also below the peer group average of 6.54x. On simple comparisons, that points to a much lower revenue multiple than many competitors.

Simply Wall St’s Fair Ratio for QuidelOrtho is 1.19x. This is a proprietary estimate of what the P/S might be given the company’s earnings profile, industry, profit margins, market cap and risk factors. It gives you a tailored benchmark rather than a one size fits all comparison.

Because the Fair Ratio aims to account for growth, risk and profitability, it can be more informative than just lining the stock up against peers or the broad industry. With the current P/S of 0.55x sitting below the 1.19x Fair Ratio, the shares screen as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your QuidelOrtho Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, where you outline your view on QuidelOrtho’s future revenue, earnings and margins, link that story to a forecast, and see the fair value that falls out of your assumptions.

On Simply Wall St’s Community page, Narratives let you turn the numbers into a plain English story, connect that story to a financial model, and then compare your resulting Fair Value to the current share price to help you judge whether QuidelOrtho looks attractively priced or expensive based on your own view.

Because Narratives on the platform are updated automatically when fresh data comes in, such as earnings releases or news about items like the Lifotronic supply agreement or changes to analyst targets, your fair value view can adjust without you rebuilding everything from scratch.

For QuidelOrtho, one investor might build a bullish Narrative closer to a US$62.00 fair value, while another might anchor to a more cautious US$22.00 view. By seeing both side by side with today’s price, you can decide which story you find more convincing and what that means for your own buy, hold or sell timing.

Do you think there's more to the story for QuidelOrtho? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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