Amid a daily loss of -2.73% and a 3-month decline of -22.2%, investors are questioning whether Bio-Techne Corp (TECH, Financial), with an Earnings Per Share (EPS) of $1.52, is significantly undervalued. This article delves into the company's valuation to uncover if the current market price truly reflects its intrinsic value. Read on for a detailed analysis that could inform your investment decision in Bio-Techne (TECH).
Company Introduction
Bio-Techne Corp (TECH, Financial) operates at the forefront of the life sciences sector, serving pharmaceutical, biotechnological, academic, and diagnostic markets. Based in Minnesota, Bio-Techne's business is segmented into protein sciences, which generates 75% of its revenue, and diagnostics and genomics, accounting for the remaining 25%. The company's expertise in protein characterization and analysis, alongside its clinical and research antibodies, positions it as a key player in the industry. Additionally, Bio-Techne's diagnostics segment offers essential controls, calibrators, and oncology assays. With 55% of its revenue from the United States, Bio-Techne also has a significant presence in EMEA, the U.K., APAC, and other global markets. The company's financial metrics, including a market cap of $9.80 billion and sales of $1.10 billion, reflect its substantial market position. Comparing Bio-Techne's stock price of $62.26 to the GF Value of $105.44, we begin to see the potential discrepancy between market price and intrinsic value.
Summarize GF Value
The GF Value is a unique measure of a stock's true worth, factoring in historical trading multiples, a GuruFocus adjustment for past performance, and future business projections. Bio-Techne (TECH, Financial) is currently tagged as significantly undervalued by this measure. The GF Value suggests a fair trading price that the stock may gravitate towards over time. If the market price is substantially above this value, the stock might be overpriced with potentially lower future returns. Conversely, if it's below, the stock might be a bargain with the prospect of higher returns. Bio-Techne's current price of $62.26 per share suggests a significant undervaluation.
Given this undervaluation, the long-term return of Bio-Techne's stock could likely surpass its business growth, presenting a potentially attractive opportunity for investors.
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Financial Strength
Investing in companies with robust financial strength is crucial to minimize the risk of capital loss. Bio-Techne's financial strength is rated 7 out of 10, suggesting a fair financial standing. However, its cash-to-debt ratio of 0.27 ranks lower than 90.46% of its peers in the Biotechnology industry. This is a crucial factor for investors to consider when assessing the company's financial resilience.
Profitability and Growth
Profitable companies are generally safer investments, and Bio-Techne has shown consistent profitability over the past decade. With a revenue of $1.10 billion and an EPS of $1.52 over the last twelve months, the company's operating margin of 25.4% stands out in the industry. This strong profitability is reflected in GuruFocus's 9 out of 10 ranking for Bio-Techne. Furthermore, the company's average annual revenue growth of 14.4% and a 3-year average EBITDA growth rate of 5.6% highlight its solid growth prospects, positioning it favorably within the Biotechnology industry.
ROIC vs. WACC
Comparing Return on Invested Capital (ROIC) with the Weighted Average Cost of Capital (WACC) is another way to assess a company's profitability. Bio-Techne's ROIC of 11.13 indicates its efficiency in generating cash flow relative to its invested capital. However, with a WACC of 12.84, the company needs to improve its capital efficiency to create more value for shareholders. The historical comparison of Bio-Techne's ROIC vs. WACC is an important consideration for potential investors.
Conclusion
In conclusion, Bio-Techne (TECH, Financial) appears to be significantly undervalued based on GuruFocus' proprietary valuation metrics. The company's financial condition is fair, and its profitability is robust. Additionally, its growth is commendable, ranking above many peers in the Biotechnology industry. For a deeper understanding of Bio-Techne's financial health, interested investors can review 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.
