Despite a daily loss of 3.37% and a 3-month decline of 9.26%, Bio-Techne Corp (TECH, Financial) exhibits a promising Earnings Per Share (EPS) (EPS) of 1.76. This raises a critical question: Is the stock significantly undervalued? This article presents a comprehensive valuation analysis of Bio-Techne (TECH), offering potential investors valuable insights into its true worth. We invite you to delve into this analysis to make an informed investment decision.
Company Introduction
Based in Minnesota, Bio-Techne is a life sciences manufacturer supplying consumables and instruments for the pharma, biotech, academic, and diagnostic markets. The company operates in two segments: protein sciences (75% of revenue), and diagnostics and genomics (25%). With a current stock price of $71.17 and a market cap of $11.30 billion, Bio-Techne's stock appears to be significantly undervalued compared to its GF Value, an estimation of its fair value.
GF Value Summary
The GF Value is a proprietary measure of a stock's intrinsic value, computed based on historical trading multiples, a GuruFocus adjustment factor based on past returns and growth, and future business performance estimates. Bio-Techne's GF Value indicates that the stock is significantly undervalued, suggesting that its future return is likely to be much higher than its business growth.
Financial Strength
Companies with poor financial strength pose a high risk of permanent capital loss. Bio-Techne's cash-to-debt ratio of 0.45 ranks worse than 86.63% of 1526 companies in the Biotechnology industry. However, its overall financial strength is 8 out of 10, indicating strong financial health.
Profitability and Growth
Investing in profitable companies, especially those with consistent profitability over the long term, poses less risk. Bio-Techne, with an operating margin of 25.6%, ranks better than 91.75% of 1042 companies in the Biotechnology industry. Its 3-year average revenue growth rate is better than 60.21% of 769 companies in the Biotechnology industry, indicating above-average growth.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) to its weighted cost of capital (WACC) is another way to assess its profitability. Bio-Techne's ROIC was 11.44 over the past 12 months, while its WACC came in at 12.01, suggesting the company is creating value for shareholders.
Conclusion
In summary, the stock of Bio-Techne (TECH, Financial) shows every sign of being significantly undervalued. The company's financial condition is strong, and its profitability is robust. Its growth ranks better than 50% of 1260 companies in the Biotechnology industry. For more details about Bio-Techne stock, check out its 30-Year Financials here.
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