TMO Fair Value Estimate
$353.2332.9% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
Thermo Fisher Scientific Inc
Exchange: NYSESector: HealthcareIndustry: Diagnostics & Research
Thermo Fisher Scientific Inc. is the world leader in serving science, with annual revenue over $40 billion. Our Mission is to enable our customers to make the world healthier, cleaner and safer. Whether our customers are accelerating life sciences research, solving complex analytical challenges, increasing productivity in their laboratories, improving patient health through diagnostics or the development and manufacture of life-changing therapies, we are here to support them. Our global team delivers an unrivaled combination of innovative technologies, purchasing convenience and pharmaceutical services through our industry-leading brands, including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab Services, Patheon and PPD.
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Trading 33% above its estimated fair value of $353.23.
Current Price
$526.60
+2.05%GoodMoat Value
$353.23
32.9% overvaluedProfile
Valuation (TTM)
Market Cap$197.85B
P/E29.51
EV$208.91B
P/B3.70
Shares Out375.71M
P/Sales4.44
Revenue$44.56B
EV/EBITDA19.84
Thermo Fisher Scientific Inc (TMO) Valuation
GoodMoat Analysis
Thermo Fisher Scientific is unfavourable from a value investing perspective, trading at a significant premium to its estimated fair value. The current price offers a negative margin of safety and a P/E multiple that is elevated relative to its growth rate.
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Based on the GoodMoat Investment Framework's valuation assessment, Thermo Fisher Scientific (TMO) appears overvalued. The primary tool is the Discounted Cash Flow (DCF) analysis, which yields a GoodMoat Target price of $353.23. At the current price of $490.77, the stock trades at a 39% premium, resulting in a negative margin of safety. According to the framework's MoS bands, any value below 10% is considered 'Unfavourable,' and a negative value clearly fails the valuation gate. Supporting this view, the forward P/E of 27.5x is high relative to the company's current revenue growth of 7.2% YoY, suggesting the market is pricing in a level of future growth not reflected in recent results. While the P/E may be reasonable for a high-growth company, it is elevated for one with single-digit top-line expansion. The free cash flow yield of 3.4% (implying a P/FCF of ~29x) further indicates a full valuation. For a value investor seeking a margin of safety, the current price does not provide an attractive entry point, as it requires near-perfect future execution to justify its premium. Analysis based on data as of 2024-05-15.
TMO Valuation Metrics
FCF$6.34B
FCF Growth Rate7.60%
EPS Growth (CAGR)10.43%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →TMO Valuation & Fair Value Analysis
Thermo Fisher Scientific Inc (TMO) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for Thermo Fisher Scientific Inc is $353.23. The current stock price is $526.60, suggesting the stock is 49.1% overvalued.
The price-to-earnings (P/E) ratio is 29.51. Price-to-book ratio is 3.70. Price-to-sales ratio is 4.44. Enterprise value to EBITDA is 19.84. PEG ratio is 3.29.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Thermo Fisher Scientific Inc's intrinsic value.