Is Thermo Fisher A Buy? A Deep Dive Into Growth, Valuation, And Moat

Daniel Schönberger
13.03K Followers

Summary

  • Thermo Fisher has a wide economic moat, driven by high switching costs and a strong recurring revenue base from consumables and services.
  • Growth is slowing, with recent revenue nearly flat and free cash flow declining sharply, while debt and goodwill levels are elevated due to acquisitions.
  • Valuation is reasonable, trading near decade-low multiples, but intrinsic value calculations suggest the stock is only fairly valued unless higher growth resumes.
  • Given current fundamentals and limited double-digit growth prospects, I am keeping Thermo Fisher on my watchlist rather than rating it a buy.

Thermo Fisher Scientific in Whitby, ON, Canada

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In the past, I have covered two companies that belong to the diagnostics and research market. Sometimes the market is also referred to as the Life Sciences Tools and Services market, and while I have only written once about Danaher Corp (

This article was written by

13.03K Followers
My analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap companies).My academic background is in sociology and I hold a Master’s Degree in Sociology (with main emphasis on organizational and economic sociology) and a Bachelor’s Degree in Sociology and History.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SOLV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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