Earnings Double Issue: Bruker / Procept Biorobotics
In this double issue we'll take a look at earnings, recent goings-on and future prospects for Bruker and Procept Biorobotics
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It’s certainly a sign of today’s markets that Bruker can meet externally communicated expectations and maintain guidance for the year, yet still plunge more than 20% in one session (welcome to The Beauty Contest). I think there are two relevant explanations: 1) investors had assumed prior guidance to be too conservative and 2) BRKR’s recent run-up was closely tied to inclusion in various fashionable thematic trades (semiconductors and AI-in-biology). It’s probably a bit of both. If you’d put my feet to the fire, I’d have tentatively leaned towards a revenue beat for Q2 on the basis of recent results for LST peers but I wasn’t sure given BRKR’s idiosyncrasies (see here). But much more importantly I had been turning increasingly cautious on the stock, seeing it as highly prone to correction - full subscribers will have known this already (e.g. see here and here) and that I had been dialling down my own holding quite considerably. Herein we’ll take a look at the state of affairs and I’ll share a few reflections on BRKR’s future prospects - which, for the most part, I remain excited about.
Occasionally, an unrelenting share price decline in the face of no particular news is itself a source of signal to be taken seriously rather than noise to be ignored. I warned NFTBC readers about the possibility of Procept investors positioning for a negative guidance revision perhaps on the basis of privately obtained claims data here (and more recently here) - staring down the barrel of this inherent uncertainty is what prevented me from dialling up my own thus-far modest holding. And it looks like some version of this turned out to be the case with Procept in Q2. But the forward-looking picture is more complex than a simple cut to procedure expectations - there are a number of moving parts (some of which are quite encouraging) and the plan here is to weigh them up as best I can.
[NFTBC does not give advice - please do your own research. I currently own shares in BRKR and PRCT]
