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 58 industry peers in the Life Sciences Tools & Services industry. While TMO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TMO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year TMO was profitable.
- TMO had a positive operating cash flow in the past year.
- Each year in the past 5 years TMO has been profitable.
- In the past 5 years TMO always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of TMO (6.38%) is better than 84.48% of its industry peers.
- With an excellent Return On Equity value of 12.88%, TMO belongs to the best of the industry, outperforming 86.21% of the companies in the same industry.
- With a decent Return On Invested Capital value of 7.21%, TMO is doing good in the industry, outperforming 77.59% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for TMO is significantly below the industry average of 13.29%.
| 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 84.48% 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 82.76% of its industry peers.
- TMO's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 41.43%, TMO is in line with its industry, outperforming 41.38% of the companies in the same 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TMO is destroying value.
- Compared to 1 year ago, TMO has less shares outstanding
- TMO has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, TMO has an improved debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of TMO is 5.84, which is a neutral value as it means it would take TMO, 5.84 years of fcf income to pay off all of its debts.
- TMO has a better Debt to FCF ratio (5.84) than 65.52% of its industry peers.
- TMO has a Debt/Equity ratio of 0.62. This is a neutral value indicating TMO is somewhat dependend on debt financing.
- TMO has a worse Debt to Equity ratio (0.62) than 68.97% 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
- A Current Ratio of 1.50 indicates that TMO should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.50, TMO is doing worse than 74.14% of the companies in the same industry.
- A Quick Ratio of 1.11 indicates that TMO should not have too much problems paying its short term obligations.
- The Quick ratio of TMO (1.11) is worse than 70.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 4.53% over the past year.
- The Earnings Per Share has been growing by 12.12% on average over the past years. This is quite good.
- The Revenue has been growing slightly by 3.22% in the past year.
- The Revenue has been growing by 10.92% on average over the past years. This is quite good.
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.
- TMO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.65% yearly.
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.
- Based on the Price/Earnings ratio, TMO is valued a bit cheaper than the industry average as 75.86% of the companies are valued more expensively.
- TMO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 25.18, which means the current valuation is very expensive for TMO.
- Based on the Price/Forward Earnings ratio, TMO is valued a bit cheaper than the industry average as 77.59% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, TMO is valued at the same level.
| 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 67.24% of the companies are valued more expensively.
- 68.97% 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
- TMO has a yearly dividend return of 0.27%, which is pretty low.
- TMO's Dividend Yield is rather good when compared to the industry average which is at 0.09. TMO pays more dividend than 84.48% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, TMO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.27% |
5.2 History
- The dividend of TMO is nicely growing with an annual growth rate of 15.42%!
- TMO has been paying a dividend for at least 10 years, so it has a reliable track record.
- TMO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)15.42%
Div Incr Years7
Div Non Decr Years12
5.3 Sustainability
- TMO pays out 9.48% of its income as dividend. This is a sustainable payout ratio.
- The dividend of TMO is growing, but the earnings are growing slower. 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.