We assign a fundamental rating of 5 out of 10 to MTD. MTD was compared to 58 industry peers in the Life Sciences Tools & Services industry. MTD scores excellent on profitability, but there are some minor concerns on its financial health. MTD has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

MTD had positive earnings in the past year.
In the past year MTD had a positive cash flow from operations.
MTD had positive earnings in each of the past 5 years.
MTD had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

MTD's Return On Assets of 23.73% is amongst the best of the industry. MTD outperforms 98.28% of its industry peers.
MTD has a Return On Invested Capital of 39.45%. This is amongst the best in the industry. MTD outperforms 98.28% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MTD is significantly above the industry average of 13.29%.

		Industry Rank	Sector Rank
ROA	23.73%
ROE	N/A
ROIC	39.45%

ROA(3y)25.04%

ROA(5y)23.93%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)41.86%

ROIC(5y)39.3%

1.3 Margins

MTD has a better Profit Margin (21.20%) than 98.28% of its industry peers.
MTD's Profit Margin has improved in the last couple of years.
MTD's Operating Margin of 28.39% is amongst the best of the industry. MTD outperforms 98.28% of its industry peers.
In the last couple of years the Operating Margin of MTD has grown nicely.
MTD's Gross Margin of 59.73% is fine compared to the rest of the industry. MTD outperforms 79.31% of its industry peers.
In the last couple of years the Gross Margin of MTD has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	28.39%
PM (TTM)	21.2%
GM	59.73%

OM growth 3Y2.77%

OM growth 5Y3.56%

PM growth 3Y2.52%

PM growth 5Y3.63%

GM growth 3Y0.93%

GM growth 5Y0.74%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

MTD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, MTD has less shares outstanding
MTD has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MTD is higher compared to a year ago.

2.2 Solvency

MTD has an Altman-Z score of 10.33. This indicates that MTD is financially healthy and has little risk of bankruptcy at the moment.
MTD has a Altman-Z score of 10.33. This is amongst the best in the industry. MTD outperforms 91.38% of its industry peers.
The Debt to FCF ratio of MTD is 2.48, which is a good value as it means it would take MTD, 2.48 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.48, MTD belongs to the top of the industry, outperforming 84.48% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	2.48
Altman-Z	10.33

ROIC/WACC3.61

WACC10.94%

2.3 Liquidity

MTD has a Current Ratio of 1.07. This is a normal value and indicates that MTD is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.07, MTD is not doing good in the industry: 82.76% of the companies in the same industry are doing better.
MTD has a Quick Ratio of 1.07. This is a bad value and indicates that MTD is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of MTD (0.74) is worse than 89.66% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.07
Quick Ratio	0.74

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 9.67% over the past year.
The Earnings Per Share has been growing by 12.53% on average over the past years. This is quite good.
MTD shows a small growth in Revenue. In the last year, the Revenue has grown by 4.77%.
MTD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.18% yearly.

EPS 1Y (TTM)9.67%

EPS 3Y6.67%

EPS 5Y12.53%

EPS Q2Q%9.21%

Revenue 1Y (TTM)4.77%

Revenue growth 3Y1.37%

Revenue growth 5Y5.18%

Sales Q2Q%7.87%

3.2 Future

Based on estimates for the next years, MTD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.29% on average per year.
The Revenue is expected to grow by 4.61% on average over the next years.

EPS Next Y3.56%

EPS Next 2Y5.95%

EPS Next 3Y7.53%

EPS Next 5Y9.29%

Revenue Next Year4.18%

Revenue Next 2Y4.49%

Revenue Next 3Y4.57%

Revenue Next 5Y4.61%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 34.07, which means the current valuation is very expensive for MTD.
Based on the Price/Earnings ratio, MTD is valued a bit cheaper than 63.79% of the companies in the same industry.
MTD's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.25.
Based on the Price/Forward Earnings ratio of 30.86, the valuation of MTD can be described as expensive.
63.79% of the companies in the same industry are more expensive than MTD, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, MTD is valued at the same level.

		Industry Rank	Sector Rank
PE	34.07
Fwd PE	30.86

4.2 Price Multiples

MTD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MTD is cheaper than 65.52% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MTD is valued a bit cheaper than 75.86% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	32.75
EV/EBITDA	24.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MTD does not grow enough to justify the current Price/Earnings ratio.
MTD has an outstanding profitability rating, which may justify a higher PE ratio.