THERMO FISHER SCIENTIFIC INC (TMO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TMO - US8835561023 - Common Stock
625.98 USD
-13.47 (-2.11%)
625.9 USD
-0.08 (-0.01%)
We assign a fundamental rating of 5 out of 10 to TMO. TMO was compared to 57 industry peers in the Life Sciences Tools & Services industry. While TMO has a great profitability rating, there are some minor concerns on its financial health. TMO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- TMO had positive earnings in the past year.
- TMO had a positive operating cash flow in the past year.
- TMO had positive earnings in each of the past 5 years.
- In the past 5 years TMO always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 6.38%, TMO belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.
- TMO has a Return On Equity of 12.88%. This is amongst the best in the industry. TMO outperforms 85.96% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 7.21%, TMO is in the better half of the industry, outperforming 77.19% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for TMO is significantly below the industry average of 13.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.38% | ||
| ROE | 12.88% | ||
| ROIC | 7.21% |
ROA(3y)6.58%
ROA(5y)7.42%
ROE(3y)13.8%
ROE(5y)15.76%
ROIC(3y)7.48%
ROIC(5y)8.55%
1.3 Margins
- With an excellent Profit Margin value of 15.02%, TMO belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
- In the last couple of years the Profit Margin of TMO has remained more or less at the same level.
- TMO has a Operating Margin of 18.40%. This is amongst the best in the industry. TMO outperforms 82.46% of its industry peers.
- TMO's Operating Margin has improved in the last couple of years.
- TMO has a Gross Margin (41.43%) which is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of TMO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.4% | ||
| PM (TTM) | 15.02% | ||
| GM | 41.43% |
OM growth 3Y-12.04%
OM growth 5Y1.61%
PM growth 3Y-9.15%
PM growth 5Y0.42%
GM growth 3Y-6.24%
GM growth 5Y-1.42%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TMO is destroying value.
- TMO has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for TMO has been reduced compared to 5 years ago.
- TMO has a better debt/assets ratio than last year.
2.2 Solvency
- TMO has a debt to FCF ratio of 5.84. This is a neutral value as TMO would need 5.84 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 5.84, TMO is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- TMO has a Debt/Equity ratio of 0.62. This is a neutral value indicating TMO is somewhat dependend on debt financing.
- TMO's Debt to Equity ratio of 0.62 is on the low side compared to the rest of the industry. TMO is outperformed by 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 5.84 | ||
| Altman-Z | N/A |
ROIC/WACC0.66
WACC10.86%
2.3 Liquidity
- TMO has a Current Ratio of 1.50. This is a normal value and indicates that TMO is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.50, TMO is not doing good in the industry: 73.68% of the companies in the same industry are doing better.
- A Quick Ratio of 1.11 indicates that TMO should not have too much problems paying its short term obligations.
- TMO's Quick ratio of 1.11 is on the low side compared to the rest of the industry. TMO is outperformed by 70.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- TMO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.53%.
- TMO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.12% yearly.
- Looking at the last year, TMO shows a small growth in Revenue. The Revenue has grown by 3.22% in the last year.
- TMO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.92% yearly.
EPS 1Y (TTM)4.53%
EPS 3Y-4.52%
EPS 5Y12.12%
EPS Q2Q%9.66%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y3.03%
Revenue growth 5Y10.92%
Sales Q2Q%4.94%
3.2 Future
- The Earnings Per Share is expected to grow by 9.66% on average over the next years. This is quite good.
- Based on estimates for the next years, TMO will show a small growth in Revenue. The Revenue will grow by 4.65% on average per year.
EPS Next Y5.08%
EPS Next 2Y6.64%
EPS Next 3Y7.93%
EPS Next 5Y9.66%
Revenue Next Year3.54%
Revenue Next 2Y4.31%
Revenue Next 3Y4.71%
Revenue Next 5Y4.65%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 27.95, the valuation of TMO can be described as expensive.
- TMO's Price/Earnings ratio is a bit cheaper when compared to the industry. TMO is cheaper than 77.19% of the companies in the same industry.
- When comparing the Price/Earnings ratio of TMO to the average of the S&P500 Index (27.21), we can say TMO is valued inline with the index average.
- TMO is valuated quite expensively with a Price/Forward Earnings ratio of 25.18.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of TMO indicates a somewhat cheap valuation: TMO is cheaper than 77.19% of the companies listed in the same industry.
- TMO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.95 | ||
| Fwd PE | 25.18 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TMO is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
- 70.18% of the companies in the same industry are more expensive than TMO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.49 | ||
| EV/EBITDA | 24.51 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TMO does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of TMO may justify a higher PE ratio.
PEG (NY)5.5
PEG (5Y)2.31
EPS Next 2Y6.64%
EPS Next 3Y7.93%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.27%, TMO is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.09, TMO pays a better dividend. On top of this TMO pays more dividend than 84.21% of the companies listed in the same industry.
- With a Dividend Yield of 0.27, TMO pays less dividend than the S&P500 average, which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.27% |
5.2 History
- On average, the dividend of TMO grows each year by 15.42%, which is quite nice.
- TMO has paid a dividend for at least 10 years, which is a reliable track record.
- TMO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)15.42%
Div Incr Years7
Div Non Decr Years12
5.3 Sustainability
- 9.48% of the earnings are spent on dividend by TMO. This is a low number and sustainable payout ratio.
- TMO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP9.48%
EPS Next 2Y6.64%
EPS Next 3Y7.93%
THERMO FISHER SCIENTIFIC INC / TMO FAQ
What is the ChartMill fundamental rating of THERMO FISHER SCIENTIFIC INC (TMO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to TMO.
What is the valuation status of THERMO FISHER SCIENTIFIC INC (TMO) stock?
ChartMill assigns a valuation rating of 4 / 10 to THERMO FISHER SCIENTIFIC INC (TMO). This can be considered as Fairly Valued.
What is the profitability of TMO stock?
THERMO FISHER SCIENTIFIC INC (TMO) has a profitability rating of 7 / 10.
What is the financial health of THERMO FISHER SCIENTIFIC INC (TMO) stock?
The financial health rating of THERMO FISHER SCIENTIFIC INC (TMO) is 4 / 10.
What is the expected EPS growth for THERMO FISHER SCIENTIFIC INC (TMO) stock?
The Earnings per Share (EPS) of THERMO FISHER SCIENTIFIC INC (TMO) is expected to grow by 5.08% in the next year.