Thermo Fisher Scientific TMO
What does Thermo Fisher Scientific do?
Thermo Fisher Scientific is a U.S. provider of products and services for research, diagnostics and pharmaceutical production. The company is divided into four segments: Life Sciences Solutions (reagents, instruments and consumables for biological and medical research), Analytical Instruments (analytical devices, software and services), Specialty Diagnostics, and Laboratory Products and Biopharma Services. Customers include pharmaceutical and biotechnology companies, universities, government agencies, clinical laboratories and industrial companies.
A significant portion of revenue comes from recurring consumables, service contracts and contract services tied to equipment sales. Competitively, Thermo Fisher is among the largest and broadest providers in the industry. The group combines an instrument portfolio, laboratory supplies and contract development and manufacturing for biopharmaceuticals, allowing it to serve customers across large parts of their value chain. Competitors include Danaher, Agilent and Waters, as well as providers specialized in sub-markets.
Score profile
Rank vs. Diagnostics & Research (24 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Thermo Fisher Scientific ranks in the middle in the group Diagnostics & Research (5.7/10). On growth, the company ranks in the middle in the group Diagnostics & Research (4.6/10). On valuation (higher = cheaper), the stock ranks in the middle in the group Diagnostics & Research (4.8/10). On financial strength, Thermo Fisher Scientific ranks in the middle in the group Diagnostics & Research (4.1/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 25.9x | 26.7x | better than 64 % |
| Trailing P/E | 37.9x | 37.0x | better than 45 % |
| PEG ratio | 2.0x | 1.7x | better than 39 % |
| EV/EBITDA | 25.0x | 22.5x | better than 40 % |
| Price/sales | 5.6x | 4.9x | better than 48 % |
| Price/book | 4.9x | 5.1x | better than 54 % |
| Revenue growth | 9.1% | 8.8% | better than 52 % |
| Earnings growth | 8.7% | 17.0% | better than 40 % |
| Gross margin | 41.3% | 51.8% | better than 35 % |
| Operating margin | 20.2% | 16.3% | better than 60 % |
| Net margin | 14.9% | 9.1% | better than 69 % |
| Return on equity | 13.4% | 10.3% | better than 65 % |
| Debt/equity | 75.4% | 56.1% | better than 28 % |
| Current ratio | 1.8x | 1.8x | better than 50 % |
| Free cash flow yield | 2.4% | 2.7% | better than 44 % |
| Dividend yield | 0.3% | 0.8% | – |
| Payout ratio | 9.7% | 25.1% | – |
| Beta | 0.84 | 1.17 | – |
Valuation: what is Thermo Fisher Scientific worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Thermo Fisher Scientific a model range of 408.04 USD to 741.92 USD per share.
25 analysts, average rating “Strong buy”, average price target 756.52 USD (+5.2%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Research and development spending by pharmaceutical and biotechnology companies determines demand for reagents, consumables and contract services.
- Recurring revenue from consumables and services stabilizes the business and follows the installed base of instruments.
- Acquisitions and the integration of complementary businesses broaden the portfolio and open up scale and cost advantages.
Risks
- Government research budgets and the funding environment in the biotechnology sector can noticeably dampen customer demand.
- Acquisitions carry integration risks and can increase debt and lead to goodwill impairments.
- Regulatory requirements, trade restrictions and currency fluctuations weigh on the globally oriented business.
What to look for with Thermo Fisher Scientific
Organic revenue growth, adjusted for acquisitions and currency effects, shows underlying demand and is particularly informative for an acquisition-driven group.