QuidelOrtho trades at $27.60 per share and has stayed right on track with the overall market, gaining 5.8% over the last six months. At the same time, the S&P 500 has returned 8.8%.

Is now the time to buy QuidelOrtho, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Do We Think QuidelOrtho Will Underperform?

We're swiping left on QuidelOrtho for now. 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

In addition to reported revenue, constant currency revenue is a useful data point for analyzing Medical Devices & Supplies - Imaging, Diagnostics companies. 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

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared 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

We see the value of companies making people healthier, but in the case of QuidelOrtho, we’re out. That said, the stock currently trades at 13.7× forward P/E (or $27.60 per share). This valuation tells us a lot of optimism is priced in - we think other companies feature superior fundamentals at the moment. We’d suggest looking at the most dominant software business in the world.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.