Revvity Inc (RVTY, Financial) has experienced a significant drop in its stock price, with a daily loss of -17.8% and a 3-month loss of -34.94%. Despite these losses, the company's Earnings Per Share (EPS) (EPS) stands at 6.54. This raises the question: Is Revvity's stock modestly undervalued? This analysis aims to answer this question by examining Revvity's financial performance, intrinsic value, and future prospects.
Company Overview
Revvity Inc (RVTY, Financial) is a leading provider of instruments, tests, services, and software solutions to various industries including pharmaceutical, biomedical, chemical, environmental, and general industrial markets. The company operates in two segments: diagnostics and discovery & analytical solutions. Despite its current stock price of $80.45, the GF Value, an estimation of fair value, stands at $112.3, suggesting that the stock might be undervalued.
Understanding the GF Value
The GF Value is a unique measure of a stock's intrinsic value, calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line gives an overview of the fair value that the stock should be traded at. If the stock price significantly deviates from the GF Value Line, it may indicate overvaluation or undervaluation, affecting future returns.
Revvity's stock, with a market cap of $10 billion, is estimated to be modestly undervalued according to the GuruFocus Value calculation. This suggests that the long-term return of Revvity's stock is likely to be higher than its business growth.
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Assessing Revvity's Financial Strength
Companies with poor financial strength pose a high risk of permanent capital loss. To avoid this, investors must review a company's financial strength before purchasing shares. Revvity's cash-to-debt ratio of 0.46 ranks worse than 68.58% of 226 companies in the Medical Diagnostics & Research industry. However, its overall financial strength is 6 out of 10, indicating fair financial health.
Profitability and Growth
Investing in profitable companies poses less risk, especially those with consistent profitability over the long term. Revvity has been profitable 10 over the past 10 years, with an operating margin of 13.66%, ranking better than 74.01% of 227 companies in the industry. Despite its 3-year average revenue growth rate being worse than 74.13% of 201 companies in the industry, Revvity's 3-year average EBITDA growth rate is 26.5%, ranking better than 70.11% of companies in the industry.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) and the weighted cost of capital (WACC) is a useful way to assess profitability. Revvity's ROIC is 2.47, and its WACC is 7.68. Ideally, the ROIC should be higher than the WACC.
Conclusion
In conclusion, Revvity (RVTY, Financial) appears to be modestly undervalued. The company's financial condition is fair, its profitability is strong, and its growth ranks better than 70.11% of companies in the Medical Diagnostics & Research industry. To learn more about Revvity stock, you can check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
