Why Repligen Stock Is Sinking Today

What happened

Shares of bioprocessing technology company Repligen (NASDAQ:RGEN) were down by 10% on heavy volume as of 12:42 p.m. ET Tuesday. That steep decline appears to be connected to the first-quarter earnings report of its fellow bioprocessing and lab specialist, Sartorius (OTC:SUVP.F), which missed analysts' consensus estimates.

Sartorius, a European-based lab solutions company, delivered its Q1 report last Thursday. The biotechnology company noted that demand normalization in its life sciences unit as the market for its COVID-related products dried up resulted in declines in sales and earnings.

So what

Why is a European company's earnings report from last week weighing on Repligen's shares on Tuesday? Repligen is set to release its own Q1 report on May 2. Investors are apparently worried that the headwinds that sapped the momentum from Sartorius are affecting its segment more broadly, and that Repligen, too, will miss Wall Street's consensus estimates on the top and bottom lines.

When it delivered its Q4 2022 report back in February, Repligen warned investors that in 2023, it expects a dip in revenue of between $1.5 million and $40 million due to declining sales of COVID-related products. As of Monday, the bioprocessing company's shares were down by more than 5% since that last earnings report. Apparently, its annual forecast didn't fully resonate with this moody market until Tuesday.

Now what

Is Repligen's stock a buy on this weakness? I think so. The company is expected to put its COVID-19 headwinds behind it as soon as next year. Speaking to this point, Wall Street's average revenue forecast calls for the company's top line to rise by a healthy 19.7% in 2024 relative to 2023. So bargain hunters may want to take advantage of this dip.

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George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Repligen. The Motley Fool has a disclosure policy.