Required knowledge for Thermo Fisher Scientific (TMO) Investors

Today we're going to take a closer look at large-cap Industrials company Thermo Fisher Scientific, whose shares are currently trading at $520.38. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

Thermo Fisher Scientific's Valuation Is in Line With Its Sector Averages:

Thermo Fisher Scientific Inc. provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the United States and internationally. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 22.19 and an average price to book (P/B) ratio of 4.06. In contrast, Thermo Fisher Scientific has a trailing 12 month P/E ratio of 34.1 and a P/B ratio of 4.44.

Thermo Fisher Scientific's PEG ratio is 11.52, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Growing Revenues With Increasing Reinvestment in the Business:

2018 2019 2020 2021 2022 2023
Revenue (MM) $24,358 $25,542 $32,218 $39,211 $44,915 $43,421
Revenue Growth n/a 4.86% 26.14% 21.71% 14.55% -3.33%
Operating Margins 16% 18% 24% 26% 19% 16%
Net Margins 12% 14% 20% 20% 15% 14%
Net Income (MM) $2,938 $3,696 $6,375 $7,728 $6,960 $5,941
Earnings Per Share $7.24 $9.17 $15.96 $19.46 $17.63 $15.26
EPS Growth n/a 26.66% 74.05% 21.93% -9.4% -13.44%
Diluted Shares (MM) 406 403 399 397 394 374
Free Cash Flow (MM) $3,785 $4,047 $6,815 $6,789 $6,911 $6,546
Capital Expenditures (MM) $758 $926 $1,474 $2,523 $2,243 $1,624
Current Ratio 1.73 1.92 2.13 1.5 1.48 1.63
Total Debt (MM) $18,990 $17,752 $21,735 $34,870 $34,488 $35,284
Net Debt / EBITDA 2.79 2.43 1.2 2.58 2.41 3.15

Thermo Fisher Scientific has growing revenues and increasing reinvestment in the business and decent operating margins with a stable trend. Additionally, the company's financial statements display a strong EPS growth trend and irregular cash flows. Furthermore, Thermo Fisher Scientific has significant leverage.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.