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Key Takeaways Agilent is expanding its AI software and automation portfolio to support its biopharma growth prospects. Agilent launched xCELLigence RTCA eSight AI to simplify label-free live-cell imaging analysis. A expects fiscal Q3 2026 revenues of $1.83B-$1.85B, implying 5.0%-6.5% reported growth. Agilent Technologies (A - Free Report) shares have lost 5.2% in the year-to-date period, underperforming the Zacks Medical  industry's 2.8% growth. The dip reflects cautious laboratory spending and a challenging macroeconomic environment.

However, Agilent continues to strengthen its long-term growth prospects through product innovation and expanding artificial intelligence (AI)-enabled laboratory software and automation capabilities, supported by healthy demand across the pharmaceutical, diagnostics and advanced materials markets.

The company also benefits from growing demand for AI-enabled laboratory software and automation as pharmaceutical and biotechnology companies increasingly digitize research workflows and accelerate drug discovery. Agilent's integrated software ecosystem, led by its OpenLab and xCELLigence platforms, combines analytical instruments, software and laboratory automation to improve productivity, reduce manual intervention and deliver more consistent scientific results.

Agilent Expands AI-Powered Cell Analysis PortfolioAgilent continues to strengthen its AI-enabled laboratory portfolio through innovations spanning analytical instruments, laboratory software, automation and digital workflows, supporting the growing adoption of AI-driven research solutions.

Building on this strategy, the company launched xCELLigence RTCA eSight AI, a new AI-powered software module that simplifies label-free live-cell imaging analysis. The software enhances the xCELLigence RTCA eSight platform by combining AI-driven image analysis with impedance measurements, enabling researchers to analyze imaging and cell behavior simultaneously from the same experiment.

The new module replaces manual cell segmentation and subjective parameter tuning with a one-click automated workflow, helping researchers generate more consistent and reproducible results while reducing analysis time and lowering training requirements. Designed for drug discovery and high-throughput biopharma research, the software is expected to accelerate scientific workflows, improve laboratory productivity and expand adoption of Agilent's integrated cell analysis platform, supporting long-term software and biopharma growth.

AI Innovation Strengthens Agilent's Growth StoryAgilent continues to expand its AI capabilities across laboratory software, automation and digital workflows. During the second quarter of fiscal 2026, AI was highlighted as a key long-term growth driver, with increasing customer adoption and continued investments in digital laboratory solutions expected to support sustainable growth. Agilent is integrating AI across its analytical instruments, laboratory informatics and automation solutions to enhance scientific workflows and operational efficiency.

Agilent is further expanding its digital laboratory capabilities through its announcement of the China Innovation Center in June 2026, which focuses on AI, automation and digital laboratory technologies to enable next-generation smart laboratories. These initiatives strengthen Agilent's AI-enabled laboratory portfolio and are expected to address growing demand for AI-powered laboratory software and automation solutions, strengthening the company's long-term growth prospects.

Agilent Provides Strong Fiscal Q3 2026 OutlookAgilent's improving demand environment, expanding AI software portfolio and continued product innovation are expected to benefit the company’s top-line growth.

For the third quarter of fiscal 2026, A expects revenues to be in the range of $1.83-$1.85 billion, implying 5.0%-6.5% reported growth and 4.4%-5.9% core growth.

The Zacks Consensus Estimate for third-quarter fiscal 2026 revenues is pegged at $1.84 billion, indicating year-over-year growth of approximately 6.02%.

The consensus estimate for third-quarter fiscal 2026 earnings is pegged at $1.47 per share, which has decreased by a penny over the past 30 days, indicating year-over-year growth of 7.30%.

A’s Zacks Rank & Stocks to ConsiderCurrently, Agilent carries a Zacks Rank #3 (Hold).

Fortrea Holdings Inc (FTRE - Free Report) , Neurocrine Biosciences (NBIX - Free Report) and PTC Therapeutics (PTCT - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Medical sector. Fortrea Holdings Inc, Neurocrine Biosciences and PTC Therapeutics sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

FTRE shares have lost 1.4% in the year-to-date period. The long-term earnings growth rate for Fortrea Holdings is pegged at 40.91%.

NBIX shares have risen 25.6% in the year-to-date period. The long-term earnings growth rate for Neurocrine Biosciences is pegged at 33.41%.

Shares of PTCT have gained 16.6% in the year-to-date period. The long-term earnings growth rate for PTC Therapeutics is pegged at 27.74%.

It has been about a month since the last earnings report for Agilent Technologies (A - Free Report) . Shares have added about 0.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Agilent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Agilent Technologies Q2 Earnings Beat Estimates, Revenues Up Y/YAgilent Technologies reported second-quarter fiscal 2026 earnings of $1.49 per share, up 13.7% year over year. The figure surpassed the Zacks Consensus Estimate by 6.21%.

Quarterly revenues came in at $1.84 billion, which represented 10% reported growth year over year. The figure beat the Zacks Consensus Estimate by 2.12%. Strength in instruments and solid execution also supported a favorable mix, with 66% of fiscal second-quarter revenue coming from recurring streams such as consumables, services and informatics.

A Posts Strong Q2 Growth Across Operating SegmentsA’s top-line expansion was broad-based across its three reporting groups. The Life Sciences and Diagnostics Markets Group generated $732 million of revenues, up 12% year over year on a reported basis and 9% on a core basis.

Agilent CrossLab delivered $759 million, reflecting 6% reported growth and 2% core growth, while Applied Markets recorded $344 million, increasing 14% reported and 11% core. Segment profitability remained solid, with operating margins of 22.0% in LDG, 32.0% in CrossLab and 23.3% in Applied Markets.

Agilent’s Q2 Operating ResultsFor the second quarter of fiscal 2026, the LDG segment’s gross margin expanded 130 basis points (bps) year over year to 54.1%. ACG’s gross margin was flat year over year to 55.5%, while AMG’s gross margin expanded 230 bps year over year to 55.8%.

Research and development (R&D) expenses on a non-GAAP basis were $116 million, up 6.4% from the prior-year quarter. Selling, general, and administrative (SG&A) expenses on a non-GAAP basis rose to $409 million, marking a 9.4% increase from the prior-year quarter.

As a percentage of revenues, R&D expenses fell 20 bps year over year to 6.3%, while SG&A expenses fell 10 bps year over year to 22.3%.

Non-GAAP operating margin expanded 130 basis points year over year to 26.4% and improved 180 basis points sequentially.

A Sees Divergent Trends Across End MarketsDemand trends varied by end market, but the overall mix remained constructive. Pharma, which represented 36% of quarterly revenues, delivered 6% core growth and marked a fifth straight quarter of mid-single to low-double-digit growth, including low-double-digit growth in biotech.

Diagnostics and Clinical (16% of revenue) rose 11% on core growth, supported by expansion in Cancer Diagnostics offerings and traction for the Omnis family. Chemicals and Advanced Materials (23% of revenue) increased 8%, driven by semiconductor demand and chemicals capex investments in the Americas, while Environmental and Forensics (10% of revenue) grew 13% on competitive wins and a TSA airport security contract. Offsetting pockets of strength, Academia and Government (7% of revenue) declined 5% amid a muted research funding environment, and Food (8% of revenue) fell 3% on funding delays in China and India.

Agilent Details Geography and Business Mixeographically, results reflected strength in the Americas and Europe and a tougher year-over-year comparison in Asia-Pacific. Core revenue growth was 11% in the Americas and 8% in Europe, while APAC declined 1% on a core basis. In terms of mix, the Americas accounted for 42% of Agilent’s fiscal second-quarter revenue, Europe contributed 28% and APAC represented 30%.

Agilent also highlighted the durability of its model through the product-type mix. Consumables, services and informatics represented 66% of total revenues in the quarter, while instruments accounted for the remaining 34%. The company emphasized robust instrument growth in the quarter alongside an increasing recurring-revenue mix.

A’s Balance Sheet DetailsThe balance sheet remained steady. Cash and cash equivalents totaled $1.807 billion as of April 30, 2026, compared with $1.75 billion as of Jan. 31, 2025, while long-term debt stood at $3.051 billion.

Agilent generated $277 million in operating cash flow during the quarter and returned cash to shareholders through multiple channels. The company spent $65 million to repurchase 0.55 million shares and paid $72 million in dividends, along with $76 million of capex investment.

A Raises Full-Year Outlook and Issues Q3 TargetsA lifted its fiscal 2026 outlook, driven by increased confidence in business performance and execution. Full-year revenues are now expected to be in the range of $7.39-$7.49 billion, with core revenue growth projected to be between 4.5% and 6.0%. The company also expects 85 basis points of non-GAAP operating margin expansion at the midpoint of core growth guidance.

For the third quarter of fiscal 2026, A expects revenues in the range of $1.83-$1.85 billion, implying 5.0%-6.5% reported growth and 4.4%-5.9% core growth. Non-GAAP earnings for the quarter are expected to be in the range of $1.48-$1.50 per share, while full-year non-GAAP earnings were raised to $6.00-$6.10 per share.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.

VGM ScoresCurrently, Agilent has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Agilent has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.