Since July 2025, QuidelOrtho has been in a holding pattern, posting a small return of 4.6% while floating around $26.60.
Is now the time to buy QuidelOrtho, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Do We Think QuidelOrtho Will Underperform?
We don't have much confidence in QuidelOrtho. Here are three reasons why QDEL doesn't excite us and a stock we'd rather own.
1. Declining Constant Currency Revenue, Demand Takes a Hit
We can better understand Medical Devices & Supplies - Imaging, Diagnostics companies by analyzing their constant currency revenue. This metric excludes currency movements, which are outside of QuidelOrtho’s control and are not indicative of underlying demand.
Over the last two years, QuidelOrtho’s constant currency revenue averaged 6.1% year-on-year declines. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests QuidelOrtho might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. 
2. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, QuidelOrtho’s margin dropped by 27.6 percentage points over the last five years. Continued declines could signal it is in the middle of an investment cycle. QuidelOrtho’s free cash flow margin for the trailing 12 months was negative 5.6%.
3. New Investments Fail to Bear Fruit as ROIC Declines
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, QuidelOrtho’s ROIC has unfortunately decreased significantly. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.
Final Judgment
QuidelOrtho doesn’t pass our quality test. That said, the stock currently trades at 13× forward P/E (or $26.60 per share). At this valuation, there’s a lot of good news priced in - we think other companies feature superior fundamentals at the moment. We’d recommend looking at one of Charlie Munger’s all-time favorite businesses.
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