Avantor, Inc. (NYSE: AVTR)

Sector: Healthcare Industry: Medical Instruments & Supplies CIK: 0001722482
Market Cap 7.71 Bn
P/B 1.38
P/E -93.83
P/S 1.17
ROIC (Qtr) -1.87
Div Yield % 0.00
Rev 1y % (Qtr) -5.28
Total Debt (Qtr) 3.86 Bn
Debt/Equity (Qtr) 0.69

About

Avantor, Inc., a leading global provider of mission-critical products and services, operates under the stock symbol AVTR. The company is active in the biopharma, healthcare, education & government, and advanced technologies & applied materials industries. Avantor's main business activities encompass the provision of materials & consumables, equipment & instrumentation, and services & specialty procurement that empower scientists in their research and development endeavors (Avantor, Inc.). The company generates revenue through the sale of its products...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 644.40M provides strong 13.95x coverage of stock compensation 46.20M, indicating sustainable incentive practices.
  • Robust free cash flow of 523.60M exceeds capital expenditure of 120.80M by 4.33x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 3.42B provides 4.62x coverage of working capital 740.70M, indicating strong operational backing.
  • Tangible assets of 3.42B provide robust 5.66x coverage of other current liabilities 605.10M, indicating strong asset backing.
  • Strong tangible asset base of 3.42B provides 5.85x coverage of acquisition spending 585.20M, enabling strategic growth.

Bear case

  • Cash reserves of 251.90M provide limited coverage of acquisition spending of 585.20M, which is 0.43x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 236.80M show weak coverage of depreciation charges of 407.80M, with a 0.58 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 407.80M relative to operating cash flow of 644.40M, which is 0.63x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 523.60M represents just -0.45x of debt issuance (1.17B), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Cash position of 251.90M provides weak coverage of payables of 691.60M, which is 0.36x, indicating potential working capital stress and supplier relationship risks.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Medical Instruments & Supplies
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ISRG Intuitive Surgical Inc 174.27 Bn 61.02 17.31 0.00 Bn
2 BDX Becton Dickinson & Co 59.72 Bn 37.77 3.14 19.18 Bn
3 RMD Resmed Inc 39.76 Bn 26.76 7.37 0.85 Bn
4 ALC Alcon Inc 38.93 Bn 37.18 3.82 5.24 Bn
5 WST West Pharmaceutical Services Inc 17.69 Bn 133.13 12.54 0.30 Bn
6 HOLX Hologic Inc 16.81 Bn 30.91 4.07 2.52 Bn
7 COO Cooper Companies, Inc. 16.37 Bn 43.67 4.00 2.51 Bn
8 ALGN Align Technology Inc 13.73 Bn 36.29 3.45 0.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.99 2.75
EV to Cash from Ops. EV/CFO 17.86 39.87
EV to Debt EV to Debt 2.98 27.09
EV to EBIT EV/EBIT 48.59 32.86
EV to EBITDA EV/EBITDA 50.76 19.31
EV to Free Cash Flow [EV/FCF] EV/FCF 21.98 0.88
EV to Market Cap EV to Market Cap 1.49 -4.26
EV to Revenue EV/Rev 1.75 252.61
Price to Book Value [P/B] P/B 1.38 6.13
Price to Earnings [P/E] P/E -93.83 184.03
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -1.09
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.36
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 8.74
Interest Coverage Int. cover (Qtr) 1.36 -117.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 29.73 -53.47
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.71 414.02
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -162.70 -57.42
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -78.10 -106.89
EBIT Growth (1y) % EBIT 1y % (Qtr) -62.32 -37.00
EBT Growth (1y) % EBT 1y % (Qtr) -84.04 -42.63
EPS Growth (1y) % EPS 1y % (Qtr) -126.09 -15.05
FCF Growth (1y) % FCF 1y % (Qtr) -29.93 56.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4.74 67.95
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.56 0.54
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.17 2.51
Current Ratio Curr Ratio (Qtr) 1.49 7.80
Debt to Equity Ratio Debt/Equity (Qtr) 0.69 0.55
Interest Cover Ratio Int Coverage (Qtr) 1.36 -117.83
Times Interest Earned Times Interest Earned (Qtr) 1.36 -117.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.80 -2,368.59
EBIT Margin % EBIT Margin % (Qtr) 3.60 -2,472.59
EBT Margin % EBT Margin % (Qtr) 0.94 -2,442.52
Gross Margin % Gross Margin % (Qtr) 33.10 30.06
Net Profit Margin % Net Margin % (Qtr) -1.30 -2,438.49