Revvity Inc (RVTY, Financial) has recently seen a notable daily gain of 10.31%, yet over the past three months, the stock has experienced an 11.78% loss. With an Earnings Per Share (EPS) of 5.95, investors are prompted to consider: is Revvity modestly undervalued? This valuation analysis aims to answer that question and provide readers with a comprehensive understanding of Revvity's financial standing and future prospects.
Revvity provides a range of solutions to diverse markets, including pharmaceutical, biomedical, and industrial sectors. Operating through two main segments—diagnostics and discovery & analytical solutions—the company has carved a niche in its industry. Positioned against a current stock price of $98.68, Revvity's Fair Value (GF Value) stands at $110.19, indicating the stock may be modestly undervalued. This initial comparison sets the stage for a deeper dive into Revvity's intrinsic value.
Understanding the GF Value
The GF Value is a unique measure of intrinsic value, incorporating historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. For Revvity (RVTY, Financial), the GF Value suggests the stock is modestly undervalued, hinting at potential for higher future returns relative to its business growth. This proprietary metric serves as a benchmark for fair trading value, helping investors discern whether a stock is overvalued or undervalued.
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Financial Strength and Stability
Investing in financially robust companies is crucial to avoid capital loss. Revvity's cash-to-debt ratio of 0.36 places it below many of its industry peers. Despite this, GuruFocus ranks Revvity's financial strength as 6 out of 10, indicating a fair balance sheet and a reasonable degree of financial stability.
Profitability and Growth Prospects
Revvity's decade-long profitability underscores its solid market position. With a revenue of $2.80 billion and an operating margin of 12.81%, Revvity outperforms a significant portion of its industry counterparts. The company's profitability rank is a robust 8 out of 10. However, its 3-year average annual revenue growth rate of 0.4% suggests room for improvement when compared to industry standards. Yet, the 3-year average EBITDA growth rate of 26.5% is a promising indicator of Revvity's growth potential.
Evaluating ROIC and WACC
A critical assessment of profitability involves comparing Return on Invested Capital (ROIC) with the Weighted Average Cost of Capital (WACC). Revvity's ROIC over the past year stands at 2.21%, which is lower than its WACC of 8.08%, suggesting the company may not be creating value for shareholders at an optimal rate.
Conclusive Insights
In summary, Revvity (RVTY, Financial) presents as modestly undervalued, with fair financial health and strong profitability. Its growth trajectory, while mixed, shows promise. Investors seeking a deeper understanding of Revvity's financials are encouraged to explore its 30-Year Financials.
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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.
