Thermo Fisher Scientific Inc. (TMO) stock analysis

P/E above its 5-year median

Thermo Fisher Scientific's P/E of 37.9 is above its own 5-year median of 31.7.

P/E above the industry

Thermo Fisher Scientific's P/E of 37.9 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA above its 5-year median

Thermo Fisher Scientific's EV/EBITDA of 35.6 is above its 5-year median of 30.7.

P/B above the industry

Thermo Fisher Scientific's price-to-book of 4.86 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading above fair value

The share price of $717.71 is above our fair value estimate of $531.79.

Margin of safety under 20%

The price is 35.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 0.2% a year over the last three fiscal years.

Earnings acceleration

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

Growing slower than the industry

Revenue grew 8.3% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on capital under 10%

Return on invested capital was 8.9%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Thermo Fisher Scientific's return on equity of 13.4% 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 against its history

Needs five years of revenue and net income.

Net margin above the industry

Thermo Fisher Scientific's net margin of 14.9% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

High debt

Debt is 75.5% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 63.0% five years ago to 75.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 22.5% of total debt.

Interest well covered

Operating income covers interest expense 5.5 times.

Short-term assets cover short-term debts

Current assets are 1.81 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.24; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Thermo Fisher Scientific paid dividends worth 0.3% of the share price over the last twelve months.

Yield below Treasuries

The 0.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Thermo Fisher Scientific yields 0.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 9.5% of net income.

Covered by free cash flow

Dividends take 8.9% of free cash flow.