Revvity Plunges 8.9%: What's Fueling the Sudden Freefall?

Summary
• Revvity’s shares nosedive 8.9% in a single session, trading as low as $92.62
• Earnings beat quarterly estimates, yet full-year guidance cut to $4.85–$4.95
• CEO flags 'meaningful pullback' in China’s immunodiagnostics business
• Bollinger Bands show price near lower band at $91.80, signaling oversold territory
Revvity’s dramatic intraday collapse has stunned investors, despite outperforming earnings expectations. The stock’s sharp drop follows management’s warning about China’s regulatory shifts, which could reshape the company’s long-term growth trajectory. With the Health Care Equipment sector mixed and peers like Thermo Fisher gaining ground, the question looms: is this a buying opportunity or a red flag?

China’s Reimbursement Policy Drives Sudden Sell-Off
Revvity’s 8.9% selloff is rooted in its revised outlook for China’s immunodiagnostics market, where a new reimbursement policy has slashed demand for high-value tests. CEO Prahlad Singh explicitly cited a 'meaningful pullback' in this segment, attributing the decline to Diagnosis-Related Groups (DRGs) that incentivize hospitals to use cheaper, single-plex tests over Revvity’s multiplex offerings. The move mirrors broader industry pain, with Abbott and Danaher also reporting China-related headwinds. While Q2 revenue of $720.28M exceeded estimates, the 10% guidance cut and double-digit China sales decline in Q2 have triggered panic among investors.

Health Care Equipment Sector Splits Amid China Woes
The Health Care Equipment sector is diverging as Revvity’s struggles contrast with peers like Thermo Fisher (TMO), which raised its 2025 guidance by 1.57% despite similar China pressures. Danaher and Thermo Fisher benefited from stronger life sciences demand, while Revvity’s diagnostics division faces unique pricing pressures. This divergence highlights Revvity’s overexposure to China’s reimbursement reforms, which now account for over 30% of its revenue. Sector analysts warn that firms lacking diversified revenue streams could underperform as global regulatory shifts accelerate.

Options Playbook: Protecting Against Further Downturn
• 200-day MA: $107.80 (well above current price)
• RSI: 58.07 (neutral)
• MACD: 0.88 (bullish divergence)
• Bollinger Bands: Price at 91.80 (lower band), suggesting potential rebound
• 30D Support: $94.86–95.12 (key level to watch)
With Revvity trading near its 52W low of $87.70 and MACD showing bullish divergence, a cautious short-term strategy is warranted. Two options stand out for hedging downside risk:
• RVTY20250815P90 (Put, $90 strike, 8/15 expiry): IV 33.20%, Leverage 87.36%, Delta -0.245, Theta -0.0064, Gamma 0.044
• RVTY20250815C95 (Call, $95 strike, 8/15 expiry): IV 33.56%, Leverage 35.34%, Delta 0.4906, Theta -0.1701, Gamma 0.055
Under a 5% downside scenario (targeting $89.72), the RVTY20250815P90 would yield $0.28 per share (2.8% gain), while the RVTY20250815C95 would expire worthless. The put’s high gamma and moderate delta make it ideal for capturing a rebound, while the call’s negative theta offers time decay protection. Aggressive bulls may consider RVTY20250815C95 into a bounce above $95.50.

Backtest Revvity Stock Performance
The backtest of RVTY's performance after a -9% intraday plunge shows favorable results, with win rates and returns indicating the ETF tends to recover and even surpass its initial value in the following days:1. Frequency and Win Rates: The event occurred 593 times over the backtested period. The 3-day win rate was 52.11%, the 10-day win rate was 53.12%, and the 30-day win rate was 55.65%. This suggests that more than half of the time, RVTY either recovered or achieved higher returns in the short term after the intraday plunge.2. Returns: The average 3-day return was 0.19%, the 10-day return was 0.52%, and the 30-day return was 0.64%. Additionally, the maximum return during the backtest period was 1.02%, achieved on day 42 after the initial plunge. This indicates that while the immediate post-plunge returns were modest, there was potential for gains in the medium to long term.3. Max Return Day: The maximum return was observed on day 42, which is within the 30-day win rate timeframe. This highlights that the ETF had a chance to rebound strongly, albeit not consistently, in the days following the initial decline.In conclusion, while the initial -9% intraday plunge presented a challenging scenario, RVTY demonstrated a tendency to recover and even exceed its previous value in the following weeks. This is consistent with a strategy that focuses on medium to long-term investment horizons and technical analysis, which the user's profile suggests as a potential approach.

Revvity at Crossroads: Short-Term Pain, Long-Term Uncertainty
Revvity’s collapse reflects a perfect storm of near-term China exposure and structural challenges in its diagnostics division. While technicals suggest a potential rebound near $94.86, the 52W low at $87.70 remains a looming threat. Investors should monitor the 8/15 options expiration for liquidity clues and watch for a breakout above $96.50 to validate a recovery. Meanwhile, sector leader Thermo Fisher (TMO) is gaining 1.57%, signaling broader confidence in medtech resilience. For Revvity, the path forward hinges on management’s ability to pivot to single-plex tests and diversify its China risk. Action Plan: Buy RVTY20250815P90 for downside protection or short the stock below $93.50 if the 200D MA breaks.