BIO-TECHNE Corp (TECH) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0000842023

P/B 4.64

P/E 117.02

P/S 7.50

Market Cap 9.13 Bn

ROIC (Qtr) 3.70

Div Yield % 0.68

Rev 1y % (Qtr) -1.00

Total Debt (Qtr) 394.47 Mn

Debt/Equity (Qtr) 0.20

About

BIO-TECHNE Corp, a Minnesota-based company listed on the NASDAQ under the symbol "TECH," operates in the life science research industry. The company's primary business activities include the development, manufacturing, and selling of life science reagents, instruments, and services for research, diagnostics, and bioprocessing markets worldwide. With a global presence, Bio-Techne operates in two segments: Protein Sciences and Diagnostics and Genomics. The Protein Sciences segment, which accounts for approximately 74% of the company's net sales in...

BIO-TECHNE Corp, a Minnesota-based company listed on the NASDAQ under the symbol "TECH," operates in the life science research industry. The company's primary business activities include the development, manufacturing, and selling of life science reagents, instruments, and services for research, diagnostics, and bioprocessing markets worldwide. With a global presence, Bio-Techne operates in two segments: Protein Sciences and Diagnostics and Genomics.

The Protein Sciences segment, which accounts for approximately 74% of the company's net sales in fiscal 2023, comprises two divisions: Reagent Solutions and Analytical Solutions. Reagent Solutions offers specialized proteins, antibodies, small molecules, tissue culture sera, and cell selection technologies, while Analytical Solutions provides manual and automated protein analysis instruments and immunoassays. These divisions cater to researchers in academia and industry, offering a range of products for quantifying proteins in various biological fluids.

The Diagnostics and Genomics segment, accounting for about 26% of the company's net sales in fiscal 2023, includes three divisions: Spatial Biology, Molecular Diagnostics, and Diagnostic Reagents. The Spatial Biology division offers novel in-situ hybridization (ISH) assays for transcriptome, DNA copy, and structural variation analysis within intact cells. The Molecular Diagnostics division markets and sells products and services under the Exosome Diagnostics and Asuragen brands, providing exosome-based liquid biopsy techniques and genetic and oncology kits for research and clinical applications. The Diagnostic Reagents division provides regulated products, including calibrators, controls, and diagnostic assays, used in various diagnostic applications.

In the life science research market, Bio-Techne competes with industry giants Thermo Fisher Scientific, Merck KGaA, and Qiagen. The company maintains a strong competitive position due to its unique product offerings, high-quality products, and application expertise. Bio-Techne's customers include researchers in academia and industry, as well as diagnostic and therapeutic companies, distributed globally with a significant presence in North America, Europe, and China.

Bio-Techne's manufacturing operations utilize a wide variety of raw materials and components, including electronic components, chemicals, and biological materials. With a global supply chain, the company employs various techniques to address potential disruption and risks.

Research and development efforts at Bio-Techne focus on developing new products and technologies to expand its product portfolio and address emerging trends in the life science research market. The company introduced over 1,600 new products in fiscal 2023 and has a robust pipeline of new products and technologies in development.

Bio-Techne employs around 3,050 full-time and part-time employees globally, prioritizing recruitment, retention, talent development, and employee well-being. The company offers competitive pay, benefits, flexible work arrangements, and growth opportunities, recognized as one of America's Best Midsize Employers and one of the Best Employers for Diversity.

In addition to its core business operations, Bio-Techne complies with various laws and regulations, including medical device regulations, healthcare laws, data privacy and security laws, environmental health and safety laws, and sales, marketing, and shipping regulations.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 251.25M provides robust 0.64x coverage of total debt 394.47M, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 144.96M provide 10.53x coverage of short-term debt 13.77M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 1.20B provides 3.03x coverage of total debt 394.47M, indicating robust asset backing and low credit risk.
Operating cash flow of 251.25M provides exceptional 29.53x coverage of interest expenses 8.51M, showing strong debt service capability.
Robust free cash flow of 224.06M exceeds capital expenditure of 27.20M by 8.24x, indicating strong organic growth funding capability.

Cons

Operating cash flow of 251.25M barely covers its investment activities of (12.89M), with a coverage ratio of -19.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 251.25M provides thin coverage of dividend payments of (50.15M) with a -5.01 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Investment activities of (12.89M) provide weak support for R&D spending of 99.87M, which is -0.13x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating earnings of 114.79M show weak coverage of depreciation charges of 106.11M, with a 1.08 ratio indicating high capital intensity and potential reinvestment needs.
High depreciation of 106.11M relative to operating cash flow of 251.25M, which is 0.42x suggests significant maintenance capital requirements affecting free cash flow.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	3.72	12.31
EV to Cash from Ops.	37.44	23.25
EV to Debt	23.85	738.44
EV to EBIT	81.95	-9.16
EV to EBITDA	43.55	6.95
EV to Free Cash Flow [EV/FCF]	41.99	21.90
EV to Market Cap	1.03	65.67
EV to Revenue	7.73	227.32
Price to Book Value [P/B]	4.64	22.34
Price to Earnings [P/E]	117.02	-11.77

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	1.56	-11.94
Dividend Payout Ratio %	64.00	0.16
Dividend per Basic Share	0.32	0.01
FCF Dividend Payout Ratio %	22.21	-0.14
Interest Coverage	13.49	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	53.48	-27.13
Cash and Equivalents Growth (1y) %	-22.70	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	-48.69	-46.93
EBITDA Growth (1y) %	-28.49	-1.68
EBIT Growth (1y) %	-40.23	-56.45
EBT Growth (1y) %	-39.72	-12.70
EPS Growth (1y) %	-47.37	-28.31
FCF Growth (1y) %	-8.56	-31.90
Gross Profit Growth (1y) %	3.62	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.48	0.14
Cash Payout Ratio	0.18	0.00
Cash Ratio	1.00	3.85
Current Ratio	4.22	7.27
Debt to Equity Ratio	0.20	0.40
Interest Cover Ratio	13.49	841.00
Times Interest Earned	13.49	841.00

Profitability

Metric	Value	Industry
EBITDA Margin %	18.20	-18,234.31
EBIT Margin %	9.43	-18,580.80
EBT Margin %	8.74	-19,488.74
Gross Margin %	65.40	-7.59
Net Profit Margin %	6.40	-19,439.22

BIO-TECHNE Corp (NASDAQ: TECH)