Bio-Rad plunges 11% on earnings miss, weak 2026 outlook
Life science segment struggles amid constrained academic research spending, biotech funding challenges
Bio-Rad Laboratories shares tumbled 11% on Thursday, wiping out nearly $1 billion in market value, after the life science research and clinical diagnostics company reported fourth-quarter earnings that missed analyst expectations and issued a subdued 2026 revenue outlook.
The stock dropped to $260.44, its lowest level since November, after the company reported adjusted earnings per share of $2.51 for the final quarter of 2025, falling short of the consensus estimate of $2.74. While revenue of $693.2 million topped analyst projections, the earnings miss and bleak guidance prompted investor flight.
The company's 2026 forecast of just 0.5% to 1.5% currency-neutral revenue growth, with the first quarter expected to decline by a low single-digit percentage year-over-year, raised concerns about sustained weakness in its core markets. Process chromatography—a key product line—is expected to decline by mid-teens percentage points in 2026.
The weak guidance reflects what management characterized as "constrained academic research spending" and a "challenging biotech funding environment" that has pressured demand across the life science industry. According to MarketWatch coverage, tightening research budgets have become a persistent headwind for laboratory equipment suppliers.
Bio-Rad's performance diverged sharply between its two business segments. Clinical Diagnostics revenue grew 8.4% to $425 million, or 5.6% on a currency-neutral basis, providing a bright spot amid broader weakness. However, the Life Science segment—focused on research tools and consumables—declined 2.6% to $268 million, falling 4% on a currency-neutral basis.
For the full year 2025, Bio-Rad reported net sales of $2.58 billion, a modest 0.7% increase on a reported basis. The company generated $375 million in free cash flow for the year, converting at 138% of non-GAAP net income, and repurchased 1.2 million shares at a cost of $296 million. Approximately $285 million remains available under the buyback program.
Despite the near-term challenges, management projected non-GAAP operating margins of 12% to 12.5% for 2026, in line with fourth-quarter levels. The company expects non-GAAP gross margins to improve slightly to a range of 54% to 54.5%, compared to 52.5% in the fourth quarter.
Analysts remain broadly optimistic on the stock despite Thursday's setback, with a consensus target price of $344.00—representing roughly 32% upside from current levels. Five analysts cover the stock, with two rating it a buy and three recommending hold, according to market data.
The dramatic sell-off underscores investor sensitivity to growth prospects in the laboratory equipment space, where spending patterns have become increasingly volatile amid shifting pharmaceutical R&D priorities and broader economic uncertainty. Institutional investors hold 94.1% of Bio-Rad's outstanding shares, suggesting Thursday's decline may have been exacerbated by large portfolio adjustments.
Bio-Rad's dual-segment structure positions it somewhat defensively, as the steady demand for clinical diagnostics testing helps offset more cyclical life science research spending. However, the company's guidance for flat to 0.5% growth in Life Sciences and just 1% to 2% expansion in Clinical Diagnostics suggests both businesses face headwinds in the coming year.
The stock now trades well below its 52-week high of $343.12, though still above its yearly low of $211.43 set last spring. With a market capitalization of approximately $7.9 billion, Bio-Rad remains one of the mid-cap leaders in the life sciences instrumentation market, but Thursday's earnings miss highlights the challenges facing even established players in a sector grappling with funding pressures and evolving research priorities.