QDEL · QuidelOrtho
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $15.32
Note written ·
Price against the kill line
29.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $15.32, on record since 11 November 2026. The shares are down 26.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $15.32, the 27 August 2026 close and the late-summer high, which would show the shares leading the S&P 500; a signed sale of the point-of-care unit near the $1.5B valuation reported in June would also prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 27 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 619
- Revenue, change on a year (%)
- −11.6
- Gross margin (%)
- 46.8
- Operating margin (%)
- −1.2
- Net cash, cash less debt ($M)
- −2,771
- Enterprise value to sales (×)
- 1.4
All filed numbers
What QuidelOrtho reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 619 | −11.6 | 46.8 | −1.2 |
| first filed | 631 | +2.8 | 43.3 | −3.5 |
| first filed | 620 | −10.5 | 42.6 | −5.1 |
| first filed | 724 | +2.2 | 44.3 | −9.2 |
| first filed | 700 | −3.7 | 47.9 | −100.7 |
| first filed | 614 | −3.6 | 44.8 | −29.4 |
| Pre-tax income ($M) | −62.9 |
| Net income ($M) four quarters: −369 | −53.8 |
| Diluted shares, change on a year (%) against the quarter to 28 September 2025 | +1.0 |
| Operating cash flow ($M) | 7.9 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 166 |
| Debt ($M) | 2,937 |
| Net cash, cash less debt ($M) | −2,771 |
| Deferred revenue ($M) | 49.8 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 376 |
| Inventory ($M) | 643 |
| Shareholders' equity ($M) | 1,791 |
| Market value ($M) | 737 |
| Enterprise value, market value plus net debt ($M) | 3,508 |
| Enterprise value to sales (×) | 1.4 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.4 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 18.9% of shares outstanding sold short, 4.9 days of average trading to cover, −13.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $1.2M | $112K |
The thesis
QuidelOrtho's shares are more likely to lag the S&P 500. Third-quarter revenue fell 11.6%, net leverage rose to 4.5 times, and the point-of-care sale that would cut $2.94B of borrowings is still unsigned. A signed deal or the fourth-quarter report settles it.
The company reported on 3 November 2026. Revenue was $618.9M, below the $628.1M consensus estimate cited in market news. Full-year guidance was narrowed toward its low end. Adjusted earnings per share (EPS) of $0.31 beat the $0.20 estimate, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) reached a 23.9% margin. The rating is Low because the profit beat came from cost control while the business that is up for sale shrank.
That business is the problem. Point-of-care revenue fell 27.3% to $119.6M on a 39% drop in respiratory testing. In the second quarter it had grown 16%, the main support for a sale near the $1.5B valuation the Financial Times reported on 27 June 2026. Asked about the sale on the 3 November 2026 call, Chief Executive Brian Blaser declined to discuss rumours and said the company is "looking at every option that supports deleveraging."
The company answered with a restructuring. It is splitting into Core Diagnostics and Point of Care Diagnostics, targets more than $80M of annual savings in 2027, and expects $30–35M of one-time charges in the fourth quarter of 2026. The 8-K filed 3 November 2026 reports that the chief operating officer role was eliminated. The shares closed at $14.35 on 4 November 2026 and $10.70 on 6 November 2026.
Bullish and bearish views on QuidelOrtho Corporation
The bull case on QuidelOrtho Corporation (QDEL), in brief: margins held up despite falling sales. The bear case: revenue is shrinking.
Bull case
- Margins held up despite falling sales. Third-quarter adjusted EBITDA was $148.0M, a 23.9% margin, and adjusted EPS was $0.31 against a $0.20 estimate (company release and market news, 3 November 2026).
- Cash burn stopped in the quarter. Free cash flow was $0.3M in the third quarter, against negative $136M in the second quarter, on better working capital and lower capital spending (company release and call, 3 November 2026).
- Savings are sized and dated. The restructuring targets more than $80M of annual savings in 2027. Chief Financial Officer Micah Young said on 3 November 2026 that it "should more than offset" the China headwind.
- The core lab business still grows outside China. Labs revenue outside China rose 3.3% as reported in the third quarter, and revenue excluding respiratory, China and US donor screening grew 2.3% (company release, 3 November 2026).
- A sale is still on the table. The Financial Times reported on 27 June 2026 that Advent International, SK Capital Partners and Archimed were interested in the point-of-care unit at about $1.5B. Management did not rule it out on 3 November 2026.
Bear case
- Revenue is shrinking. Third-quarter revenue fell 11.6% to $618.9M. Labs revenue fell 5.5% to $353.2M, and China labs revenue fell 45.5% to $36.9M after pricing changes in Chinese diagnostics (company release, 3 November 2026).
- The asset for sale weakened. Point-of-care revenue fell 27.3% to $119.6M in the third quarter on a softer respiratory season (company release, 3 November 2026). A shrinking unit is harder to sell at the June valuation.
- Guidance moved to the low end. Full-year revenue guidance went to $2.52–2.54B from $2.52–2.60B, and adjusted EPS to $0.65–0.70 from $0.65–0.90 (company release, 3 November 2026). Free-cash-flow guidance, withdrawn on 6 August 2026, was not reinstated.
- Debt is heavy and partly near-term. Total borrowings were $2,937.3M at 27 September 2026, of which $424.4M was current, against $166.4M of cash (company release). Net leverage rose to 4.5 times adjusted EBITDA from 4.3 times in the second quarter, and the company amended its credit agreement for added flexibility through the second quarter of 2028 (3 November 2026 call).
- Cash still flows out for the year. Free cash flow for the first nine months of 2026 was negative $202.8M, and the CFO expects most of the $30–35M of restructuring charges to be paid in cash in the fourth quarter (3 November 2026).
- Dilution remains possible. An automatic registration statement (Form S-3ASR), filed 17 July 2026, lets the company sell shares quickly.
Price setup
The shares closed at $11.91 on 11 November 2026. That is below the 50-day moving average of $12.44 and well below the 200-day moving average of $15.54. Over three months they are down 21.1%, from $15.09 on 13 August 2026. The last close is 66.5% below the 52-week intraday high of $35.58 set on 16 January 2026.
The report set the recent range. The shares closed at $14.35 on 4 November 2026, then at $12.84 on 5 November 2026 and $10.70 on 6 November 2026. They recovered to $12.09 on 9 November 2026 and have held between $11.52 and $12.09 since. The 52-week closing low is $9.96, set on 11 May 2026. The 200-day average is the level a recovery would have to reclaim for the shares to show leadership.
SEC Form 4 filings from August to October 2026 show only option exercises with shares withheld for tax, the latest by Chief Technology Officer Jonathan Siegrist at $13.91 on 15 October 2026. None is an open-market sale.
Catalysts ahead
- ~February 2027 (est.): Q4 and full-year 2026 results, with first 2027 outlook. Shows whether the respiratory season lifted point-of-care revenue, whether 2027 guidance credits the $80M of savings, and whether free-cash-flow guidance returns.
- unscheduled: Definitive agreement for the point-of-care unit. The only reported route to a large cut in $2.94B of borrowings; none had been announced by 12 November 2026, and the unit's revenue fell 27.3% in Q3.
What would change the view
A daily close above $15.32, the 27 August 2026 close and the late-summer high, which would show the shares leading the S&P 500; a signed sale of the point-of-care unit near the $1.5B valuation reported in June would also prove this call wrong.
What it trades with
QuidelOrtho's shares trade on company events: the sale process, the debt load, China lab volumes and the restructuring. The swing from $14.35 to $10.70 in the two sessions after 4 November 2026 followed the company's own report. Point-of-care revenue tracks the respiratory illness season, so winter flu and COVID testing volumes drive that unit more than any move in diagnostics peers. China now accounts for about 8% of 2026 revenue by the CFO's estimate on 3 November 2026, falling to 4–5% in 2027, so Chinese pricing policy weighs less on the shares each quarter.
The evidence, claim by claim (8)
- Q3 2026 revenue $618.9M, down 11.6%; Labs $353.2M, down 5.5%; Point of Care $119.6M, down 27.3%; China Labs $36.9M, down 45.5%. QuidelOrtho Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Q3 2026 adjusted EBITDA $148.0M (23.9% margin), adjusted diluted EPS $0.31, GAAP net loss $53.8M; quarterly free cash flow $0.3M, nine-month free cash flow −$202.8M. QuidelOrtho Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- FY2026 guidance narrowed: revenue $2.52–2.54B (from $2.52–2.60B), adjusted EBITDA $540–545M (from $540–560M), adjusted EPS $0.65–0.70 (from $0.65–0.90); no free-cash-flow guidance. QuidelOrtho Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Total borrowings $2,937.3M ($424.4M current) and cash $166.4M at quarter end; CFO put net leverage at 4.5x adjusted EBITDA, up from 4.3x in Q2. Q3 2026 earnings release; Q3 2026 earnings call · as of
- Restructuring into Core Diagnostics and Point of Care Diagnostics targets over $80M of annual savings in 2027, with $30–35M of one-time charges expected in Q4 2026; the COO role was eliminated. QuidelOrtho Q3 2026 earnings release and 8-K, 3 November 2026 · as of
- Asked about a point-of-care sale, CEO Brian Blaser declined to discuss rumours and said the company is looking at every option that supports deleveraging; CFO expects China at about 8% of 2026 revenue and 4–5% in 2027. QuidelOrtho Q3 2026 earnings call, 3 November 2026 · as of
- The Financial Times reported QuidelOrtho was exploring a sale of its point-of-care testing unit at about a $1.5B valuation, with Advent International, SK Capital Partners and Archimed named as interested. Bloomberg summary of Financial Times report, 27 June 2026 · as of
- Shares closed at $14.35 on 4 November 2026, $12.84 on 5 November 2026, $10.70 on 6 November 2026 and $11.91 on 11 November 2026. Split-adjusted daily closes · as of
Sources
- QuidelOrtho Corp - Form 8-K - FY2026 · sec.gov ·
- QuidelOrtho (QDEL) Q3 2026 Earnings Call Transcript · fool.com ·
- QuidelOrtho Corp (QDEL) Q3 2026 Earnings Call Highlights: Revenue Falls 12% on China Destocking and Respiratory Softness, but Cost Cuts and Free Cash Flow Improvement Offer a Path Forward · gurufocus.com
- QuidelOrtho (QDEL) Unveils Restructuring Plan, Shares Drop 11% in After-Hours Trading · gurufocus.com
- QuidelOrtho Reports Third Quarter 2026 Financial Results · nasdaq.com ·
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