Thermo Fisher Scientific Inc. (NYSE: TMO)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0000097745
P/B 4.25
P/E 33.00
P/S 4.96
Market Cap 216.83 Bn
ROIC (Qtr) 7.72
Div Yield % 0.29
Rev 1y % (Qtr) 4.94
Total Debt (Qtr) 35.68 Bn
Debt/Equity (Qtr) 0.70

About

Thermo Fisher Scientific Inc., often recognized by its stock symbol TMO, is a prominent player in the biotechnology, pharmaceutical, and healthcare industries. The company is dedicated to enabling its customers to make the world healthier, cleaner, and safer by providing an unparalleled combination of innovative technologies, convenient purchasing options, and pharmaceutical services through its industry-leading brands. Thermo Fisher operates in various business segments, each contributing significantly to its revenue generation. These segments...

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Stock Price Chart

Analysis

Pros

  • Operating cash flow of 7.65B provides exceptional 1530.20x coverage of minority interest expenses 5M, showing strong core operations.
  • Operating cash flow of 7.65B provides strong 25.09x coverage of stock compensation 305M, indicating sustainable incentive practices.
  • Tangible assets of 37.49B provide exceptional 13.15x coverage of deferred revenue 2.85B, showing strong service capability backing.
  • Robust free cash flow of 6.14B exceeds capital expenditure of 1.51B by 4.08x, indicating strong organic growth funding capability.
  • Retained earnings of 57.35B provide full 1.80x coverage of long-term debt 31.86B, indicating strong internal capital position.

Cons

  • Operating cash flow of 7.65B barely covers its investment activities of (4.92B), with a coverage ratio of -1.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (4.92B) provide weak support for R&D spending of 1.41B, which is -3.48x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 7.65B provides thin coverage of dividend payments of (623M) with a -12.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.98B provide limited coverage of acquisition spending of (4.04B), which is -0.49x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 6.14B represents just -7.81x of debt issuance (787M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 216.83 Bn 33.00 4.96 35.68 Bn
2 DHR Danaher Corp /De/ 162.47 Bn 46.38 6.69 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 56.88 Bn 55.36 13.65 1.09 Bn
4 A Agilent Technologies, Inc. 39.82 Bn 32.64 5.87 3.41 Bn
5 IQV Iqvia Holdings Inc. 38.85 Bn 30.28 2.44 15.19 Bn
6 NTRA Natera, Inc. 31.32 Bn -101.29 14.80 0.18 Bn
7 MTD Mettler Toledo International Inc/ 28.99 Bn 34.68 7.35 2.21 Bn
8 WAT Waters Corp /De/ 22.92 Bn 35.32 7.38 1.49 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 2.40 2.69
EV to Cash from Ops. 32.35 18.14
EV to Debt 6.94 52.51
EV to EBIT 29.17 19.22
EV to EBITDA 24.02 4.35
EV to Free Cash Flow [EV/FCF] 40.27 2.84
EV to Market Cap 1.14 1.52
EV to Revenue 5.66 4.79
Price to Book Value [P/B] 4.25 1.34
Price to Earnings [P/E] 33.00 22.02

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 10.55 -1.96
Dividend Payout Ratio % 9.70 2.83
Dividend per Basic Share 1.68 0.19
FCF Dividend Payout Ratio % 10.33 1.92
Interest Coverage 6.19 -126.58

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -18.21 -31.50
Cash and Equivalents Growth (1y) % -57.33 21.37
Dividend Growth (1y) % 10.53 0.24
EBIAT Growth (1y) % 5.03 -55.24
EBITDA Growth (1y) % -0.74 -447.96
EBIT Growth (1y) % 2.97 -40.50
EBT Growth (1y) % 4.97 -70.94
EPS Growth (1y) % 8.44 -70.02
FCF Growth (1y) % -21.48 56.33
Gross Profit Growth (1y) % 4.49 185.11

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.42 0.56
Cash Payout Ratio 0.07 0.01
Cash Ratio 0.13 1.21
Current Ratio 1.50 2.64
Debt to Equity Ratio 0.70 -0.80
Interest Cover Ratio 6.19 -126.58
Times Interest Earned 6.19 -126.58

Profitability

Metric Value Industry Percentile
EBITDA Margin % 25.80 -129.91
EBIT Margin % 19.40 -156.71
EBT Margin % 16.27 -162.23
Gross Margin % 41.30 47.70
Net Profit Margin % 15.00 -189.30