Amidst a volatile market, Bruker Corp (BRKR, Financial) has displayed a notable daily gain of 5.42%, coupled with a 3-month gain of 3.74%. With an Earnings Per Share (EPS) of $2.17, investors are contemplating whether Bruker (BRKR) stands as modestly undervalued. This valuation analysis aims to shed light on Bruker's financial stature and market valuation, providing investors with a comprehensive overview to inform their investment decisions.
Company Introduction
Bruker Corp manufactures scientific instruments and diagnostic tests, serving the life sciences, pharmaceutical, and biotechnology industries. With its primary revenue generated from the BSI CALID segment and a significant market presence in Europe, Bruker operates through multiple segments including BSI BioSpin, BSI CALID, BSI Nano, and Bruker Energy and Supercon Technologies (BEST). Currently, Bruker's stock price is juxtaposed against a GF Value of $83.15, implying a potential undervaluation. This introduction sets the stage for a deeper dive into Bruker's intrinsic value and market performance.
Summarize GF Value
The GF Value is a unique measure indicating the intrinsic value of a stock, considering historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. Bruker (BRKR, Financial), with a market cap of $8.90 billion and a current price of $64.6 per share, is deemed modestly undervalued according to the GF Value. This assessment suggests that Bruker's stock offers a promising opportunity for investors, with a higher likelihood of favorable long-term returns relative to its business growth.
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Financial Strength
Investors are advised to consider a company's financial strength to avoid potential capital loss. Bruker's cash-to-debt ratio of 0.3 ranks lower than the majority of its industry peers, leading to a financial strength rating of 6 out of 10 by GuruFocus. This rating indicates a fair balance sheet but warrants investor diligence.
Profitability and Growth
Profitability is a less risky venture when consistent over time. Bruker boasts a 10-year profitability streak with a robust operating margin of 17.19%, outperforming 80% of its industry competitors. The company's profitability is ranked highly, reflecting strong performance potential.
Growth is pivotal for valuation, and Bruker's annual revenue growth rate of 8.6% positions it favorably within its industry. The company's growth has been solid, with a 3-year average EBITDA growth of 13.5%, indicating a promising trajectory for shareholder value creation.
ROIC vs WACC
Comparing Return on Invested Capital (ROIC) to the Weighted Average Cost of Capital (WACC) reveals Bruker's efficiency in generating cash flow relative to its invested capital. With an ROIC of 12.62 and a WACC of 10.1, Bruker demonstrates value creation for its shareholders.
Conclusion
In conclusion, Bruker (BRKR, Financial) appears to be modestly undervalued. The company's financial condition is fair, and its profitability is strong. Its growth ranks favorably compared to its peers, suggesting a solid foundation for future performance. For a detailed analysis of Bruker's financials, investors can explore 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.
