As of July 21, 2023, Bio-Rad Laboratories Inc (BIO, Financial) experienced a gain of 4.01%, with a stock price of $414.18. The company, which is currently valued at $12 billion, reported sales of $2.8 billion. However, it experienced a loss per share of $-6.54. According to the GF Value, the estimated fair value of the company's stock is $612.42, suggesting that it may be significantly undervalued.
Headquartered in Hercules, California, Bio-Rad Laboratories develops, manufactures, and markets products for the clinical diagnostics and life sciences markets. The company's operations are divided into diagnostics, which account for 53% of sales, and life sciences, which make up the remaining 47%. Bio-Rad Laboratories is geographically diverse, with major markets in the Americas, Europe and Africa, and Asia-Pacific. The company also owns a 37% stake in Sartorius AG, a laboratory and biopharmaceutical supplier.
GF Value Analysis of Bio-Rad Laboratories
The GF Value of a stock is a unique indicator of its intrinsic worth, calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. If the share price is significantly below the GF Value calculation, the stock may be undervalued and have higher future returns. For Bio-Rad Laboratories, the current price of $414.18 per share suggests that the stock is significantly undervalued.
Given that Bio-Rad Laboratories is significantly undervalued, the long-term return of its stock is likely to be much higher than its business growth.
Link: These companies may deliver higher future returns at reduced risk.
Financial Strength of Bio-Rad Laboratories
Companies with poor financial strength offer investors a high risk of permanent capital loss. To avoid this, an investor must review a company’s financial strength before deciding to purchase shares. Bio-Rad Laboratories has a cash-to-debt ratio of 1.34, which ranks worse than 60.58% of companies in the Medical Devices & Instruments industry. The overall financial strength of Bio-Rad Laboratories is 7 out of 10, indicating that it is fairly strong.
Profitability of Bio-Rad Laboratories
Investing in profitable companies, especially those with consistent profitability over the long term, is less risky. Bio-Rad Laboratories has been profitable 9 out of the past 10 years. Over the past twelve months, the company had a revenue of $2.8 billion and a loss per share of $-6.54. Its operating margin is 14.16%, which ranks better than 73.08% of companies in the Medical Devices & Instruments industry. Overall, the profitability of Bio-Rad Laboratories is ranked 7 out of 10, indicating fair profitability.
Growth of Bio-Rad Laboratories
Growth is probably the most important factor in the valuation of a company. The 3-year average annual revenue growth of Bio-Rad Laboratories is 7.1%, which ranks worse than 50.56% of companies in the Medical Devices & Instruments industry. The 3-year average EBITDA growth rate is 0%, which ranks worse than 0% of companies in the Medical Devices & Instruments industry.
ROIC vs WACC of Bio-Rad Laboratories
Another way to evaluate a company’s profitability is to compare its return on invested capital (ROIC) to its weighted cost of capital (WACC). Over the past 12 months, Bio-Rad Laboratories’s ROIC was 2.73, while its WACC came in at 8.1.
Conclusion
Overall, Bio-Rad Laboratories (BIO, Financial) stock is believed to be significantly undervalued. The company's financial condition is fair and its profitability is fair. Its growth ranks worse than 0% of companies in the Medical Devices & Instruments industry. To learn more about Bio-Rad Laboratories stock, you can check out its 30-Year Financials here.
To find out the high-quality companies that may deliver above-average returns, please check out GuruFocus High Quality Low Capex Screener.
