Avantor, Inc. (AVTR) stock analysis

P/E below its 5-year median

Avantor's P/E of 31.5 is below its own 5-year median of 33.5.

P/E below the industry

Avantor's P/E of 31.5 is below the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA below its 5-year median

Avantor's EV/EBITDA of 15.3 is below its 5-year median of 17.8.

P/B below the industry

Avantor's price-to-book of 1.83 is below the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading below fair value

The share price of $15.73 is below our fair value estimate of $19.15.

Margin of safety under 20%

The price is 17.9% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 0.9% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Guidance issued

The latest outlook (Fiscal 2026 Organic revenue growth, Oct 28, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 31.6% over the last twelve months, against 33.1% a year earlier.

Return on equity under 15%

Return on equity was 5.9% over the last twelve months and averaged 8.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.3%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Avantor's return on equity of 5.9% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 5.1% over the last twelve months, against a 5-year average of 4.8%.

Net margin above the industry

Avantor's net margin of 5.1% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

High debt

Debt is 63.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 183% five years ago to 63.1%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 15.9% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.0 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.89 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.17; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Avantor has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.