THERMO FISHER SCIENTIFIC INC (TMO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TMO - US8835561023 - Common Stock
623.91 USD
-2.71 (-0.43%)
623.91 USD
0 (0%)
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. TMO scores excellent on profitability, but there are some minor concerns on its financial health. TMO is not valued too expensively and it also shows a decent growth rate.
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
- TMO has a Return On Assets of 6.38%. This is amongst the best in the industry. TMO outperforms 84.48% of its industry peers.
- The Return On Equity of TMO (12.88%) is better than 86.21% of its industry peers.
- TMO has a Return On Invested Capital of 7.21%. This is in the better half of the industry: TMO outperforms 77.59% of its industry peers.
- TMO had an Average Return On Invested Capital over the past 3 years of 7.48%. This 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
- TMO has a Profit Margin of 15.02%. This is amongst the best in the industry. TMO outperforms 84.48% of its industry peers.
- TMO's Profit Margin has been stable in the last couple of years.
- The Operating Margin of TMO (18.40%) is better than 82.76% of its industry peers.
- In the last couple of years the Operating Margin of TMO has grown nicely.
- TMO has a Gross Margin of 41.43%. This is comparable to the rest of the industry: TMO outperforms 41.38% of its industry peers.
- TMO's Gross Margin has been stable in the last couple of years.
| 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.
- TMO has less shares outstanding than it did 5 years ago.
- TMO has a better debt/assets ratio than last year.
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's Debt to FCF ratio of 5.84 is fine compared to the rest of the industry. TMO outperforms 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 Debt to Equity ratio of 0.62. This is in the lower half of the industry: TMO underperforms 68.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 5.84 | ||
| Altman-Z | N/A |
ROIC/WACC0.67
WACC10.83%
2.3 Liquidity
- A Current Ratio of 1.50 indicates that TMO should not have too much problems paying its short term obligations.
- TMO has a worse Current ratio (1.50) than 74.14% of its industry peers.
- TMO has a Quick Ratio of 1.11. This is a normal value and indicates that TMO is financially healthy and should not expect problems in meeting its short term obligations.
- TMO has a Quick ratio of 1.11. This is in the lower half of the industry: TMO underperforms 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.
- Measured over the past years, TMO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.12% on average per year.
- Looking at the last year, TMO shows a small growth in Revenue. The Revenue has grown by 3.22% in the last year.
- Measured over the past years, TMO shows a quite strong growth in Revenue. The Revenue has been growing by 10.92% on average per year.
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
- Based on estimates for the next years, TMO will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.66% on average per year.
- The Revenue is expected to grow by 4.65% on average over the next years.
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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- With a Price/Earnings ratio of 27.85, TMO can be considered very expensive at the moment.
- 75.86% of the companies in the same industry are more expensive than TMO, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 28.87, TMO is valued at the same level.
- Based on the Price/Forward Earnings ratio of 25.10, the valuation of TMO can be described as expensive.
- Based on the Price/Forward Earnings ratio, TMO is valued a bit cheaper than 77.59% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of TMO to the average of the S&P500 Index (25.96), we can say TMO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.85 | ||
| Fwd PE | 25.1 |
4.2 Price Multiples
- TMO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TMO is cheaper than 68.97% of the companies in the same industry.
- 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 | 38.36 | ||
| EV/EBITDA | 24.44 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- TMO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.48
PEG (5Y)2.3
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 84.48% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, 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
- 9.48% of the earnings are spent on dividend by TMO. This is a low number and 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.