Agilent Technologies Inc (A, Financial), with a current stock price of $128.97, has shown no daily change in stock price but has experienced a 14.26% gain over the past three months. The company's Earnings Per Share (EPS) stands at 4.21. Investors are keen to understand: is Agilent Technologies modestly undervalued? The following valuation analysis aims to answer this question and provide a clear picture of the company's intrinsic value.
Company Introduction
Agilent Technologies Inc (A, Financial) has a rich history, originating from Hewlett-Packard in 1999, and has since become a powerhouse in the life sciences and diagnostics sector. With its diverse portfolio, Agilent Technologies caters to customers across various industries, including biopharmaceuticals, chemicals, and advanced materials. The company's global presence is marked by significant operations in the U.S. and China. Currently, Agilent Technologies' stock price is positioned against a GF Value of $149.8, indicating a potential undervaluation worth exploring.
Summarize GF Value
The GF Value is a unique measure of a stock's intrinsic value, incorporating historical trading multiples, an adjustment factor based on the company's past performance, and projections of future business performance. The GF Value Line serves as a benchmark, suggesting a fair trading value for the stock. When the stock price deviates significantly from the GF Value Line, it suggests potential overvaluation or undervaluation, consequently affecting future returns.
Agilent Technologies (A, Financial) presents signs of modest undervaluation according to the GF Value, with a market cap of $37.70 billion. This valuation suggests that the long-term return on Agilent Technologies' stock could surpass its business growth, presenting an attractive opportunity for investors.
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Financial Strength
Investors must consider a company's financial strength to avoid permanent capital loss. Agilent Technologies' cash-to-debt ratio of 0.58 ranks it in a weaker position than 62.93% of its peers in the Medical Diagnostics & Research industry. Despite this, the company's financial strength is rated 8 out of 10 by GuruFocus, indicating a robust balance sheet.
Profitability and Growth
Agilent Technologies has maintained profitability for 10 out of the past 10 years. With a 12-month revenue of $6.80 billion and an Earnings Per Share (EPS) of $4.21, the company boasts an operating margin of 19.76%, outperforming 87.67% of its industry counterparts. Furthermore, Agilent Technologies' average annual revenue growth is 10.5%, with a 3-year average EBITDA growth of 13.5%, reflecting a solid growth trajectory.
ROIC vs. WACC
Comparing a company's Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) is crucial for assessing profitability. Agilent Technologies' ROIC of 14.5 is higher than its WACC of 11.06, indicating value creation for shareholders. The historical ROIC vs WACC comparison is an essential consideration for potential investors.
Conclusion
Overall, Agilent Technologies (A, Financial) appears modestly undervalued. The company's financial condition and profitability are strong, and its growth is commendable within its industry. For a deeper dive into Agilent Technologies' financials, investors can explore the 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.
