Last Update 11 Jan 26

Fair value Increased 0.22%

RVTY: Q4 Margin Ramp And Buybacks Poised To Meet Cautious Recovery

The analyst price target for Revvity has been nudged higher by about $0.25, reflecting Street analysts' generally constructive view on recovering end markets, Q4 guidance that many see as achievable, and improving sector sentiment, even as some firm specific and China related risks remain in focus.

Analyst Commentary

Street research on Revvity is mixed but tilts constructive, with several firms nudging price targets higher while one new initiation takes a more cautious stance. The debate centers on how achievable near term guidance is, how much upside is already reflected in the valuation, and how company specific and China related headwinds might influence growth expectations into 2026.

Bullish Takeaways

Bullish analysts see recovering end markets and sector rotation as supportive for Revvity, arguing this setup could support the company as a potential tools exposure going into 2026.
Some view Q3 as a workable base, describing the print as straightforward or mixed but still compatible with the steeper Q4 sales and operating margin ramp implied in guidance.
Q3 organic growth of 1% in line with Street expectations and Q3 EPS of $1.18 above Street estimates, along with a FY25 EPS guidance range of $4.90 to $5.00, are cited as signs that execution is tracking close to plan.
Healthy procedure and capital expenditure trends into 2026 and early recovery signs in China are referenced by bullish analysts as supportive for medium term demand, which they see as helping the risk reward skew more positively.

Bearish Takeaways

Bearish analysts argue that Revvity faces several company specific challenges and do not see the stock clearly outperforming peers in the near term, even if the valuation screens attractively.
There is concern that the organic revenue growth expectations for 2026 are set too high, especially given China reimbursement challenges and tough comparisons that could cap upside to growth.
Some point out that the step up required for Q4 in both sales and margins, while described as achievable by more optimistic voices, still carries execution risk if demand or mix do not cooperate.
Sector level issues such as potential ACA and Medicare changes are cited as overhangs that bears are watching closely, given the possible implications for procedure trends and funding, which could weigh on sentiment even if company level execution stays solid.

What's in the News

Revvity announced a collaboration with Eli Lilly to make Lilly TuneLab predictive models available through the Revvity Signals platform, aiming to support AI enabled drug discovery while keeping customer data private and secure (Client Announcements).
The company introduced its upcoming Signals Xynthetica Models as a Service AI offering within the Revvity Signals platform, designed to support AI augmented molecular and materials design and tie predictive models directly to wet lab data and workflows (Product Related Announcements).
Revvity indicated it is seeking acquisitions, with management emphasizing interest in deals that fit a defined investment “strike zone” while also commenting on how the company's share price affects M&A decisions (Seeking Acquisitions/Investments).
The company revised its 2025 revenue guidance to a range of US$2.83b to US$2.88b to reflect foreign exchange, while reaffirming its organic growth guidance of 2% to 4% for the year (Corporate Guidance).
Revvity's board authorized a share repurchase program of up to US$1,000m over 2 years, and by October 23, 2025 the company had repurchased 8,503,054 shares, or 7.15%, for US$839.16m under the buyback announced on November 4, 2024 (Buyback Transaction Announcements, Buyback Tranche Update).

Valuation Changes

Fair Value: nudged higher from US$114.38 to US$114.63, representing a modest upward adjustment in the modelled valuation level.
Discount Rate: trimmed slightly from 8.43% to 8.41%, indicating a marginally lower required rate of return used in the analysis.
Revenue Growth: raised from 5.08% to 5.49%, reflecting a somewhat stronger growth assumption in the updated model.
Net Profit Margin: adjusted down slightly from 20.28% to 20.04%, indicating a small reduction in expected profitability over time.
Future P/E: held broadly stable, moving from 20.93x to 20.96x, indicating only a very small change in the valuation multiple assumption.

Expansion in high-growth software and diagnostics, alongside product mix shift, is driving recurring, higher-margin revenue and robust earnings growth.
Strategic investments, contract wins, and aggressive share buybacks are supporting revenue momentum, operational flexibility, and enhanced capital returns.
Regulatory shifts, weak end-market demand, margin pressures, trade risks, and limited growth investments threaten Revvity's long-term profitability and competitive strength.

Catalysts

About Revvity

Provides health sciences solutions, technologies, and services worldwide.What are the underlying business or industry changes driving this perspective?

Accelerating adoption of Revvity's high-growth software solutions (30%+ organic growth in Signals, record orders, high ARR and net retention), driven by pharma/biotech spending on digital transformation, supports sustained revenue growth and recurring, higher-margin streams.
Secular demand for advanced diagnostics, driven by aging populations and expansion of personalized medicine, is reflected in robust growth for reproductive health and newborn screening businesses (high single-digit global growth), positioning these segments to drive topline revenue and earnings expansion.
Ongoing shift in product mix toward higher-margin, software-enabled and consumables-driven offerings (e.g., SaaS Signals, reagents, new IDS i20 platform), along with structural cost actions, are expected to materially expand operating and net margins, with 2026 set to start at a higher 28% operating margin baseline.
Strategic investments and contract wins (e.g., Genomics England sequencing ramp–$10M visibility and pipeline for further assays/new products) leverage global R&D funding growth and genomics advances, expanding the customer pool and supporting revenue acceleration.
Aggressive share repurchase activity (nearly $450M in H1 2025, ~6% share count reduction over 12 months) enhances EPS growth and capital return, while operational flexibility and prudent cash deployment bolster future earnings and margin resilience.

Revvity Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Revvity's revenue will grow by 5.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.0% today to 18.3% in 3 years time.
Analysts expect earnings to reach $599.9 million (and earnings per share of $5.47) by about September 2028, up from $278.7 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $356 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.4x on those 2028 earnings, down from 35.4x today. This future PE is lower than the current PE for the US Life Sciences industry at 29.3x.
Analysts expect the number of shares outstanding to decline by 4.63% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.88%, as per the Simply Wall St company report.

Revvity Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Accelerating regulatory and reimbursement changes in China, such as the DRG debundling policy, are causing high-margin multiplex diagnostics test volumes to decline and could further erode revenue and operating margins, especially given China represents a meaningful market segment for Revvity's Diagnostics business.
Persistent weakness in academic and government end-markets due to funding pressures (e.g., uncertainties around NIH budgets and public sector spend) is limiting organic growth and exposing Revvity to ongoing revenue volatility and dampened long-term topline outlook.
Global cost-containment policies in healthcare (e.g., DRG, Sunshine Act, VBP in China), alongside increased focus on reducing diagnostic spending, may lead to sustained pricing and volume pressures, especially in legacy multiplex and certain diagnostics segments, negatively impacting recurring revenue streams and net margins.
Intensifying tariff risks and evolving cross-border trade dynamics between the US, EU, and China create recurring operational complexity and cost pressures that may require restructuring of Revvity's supply chain and manufacturing footprint, posing threats to gross margins and increasing execution risk.
The company's reliance on structural cost actions, share buybacks, and the absence of compelling acquisition targets may provide short-term EPS support, but could limit strategic investment in growth initiatives and innovation, ultimately constraining long-term earnings expansion and competitive positioning against larger, better-capitalized peers.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $116.812 for Revvity based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $162.0, and the most bearish reporting a price target of just $100.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.3 billion, earnings will come to $599.9 million, and it would be trading on a PE ratio of 24.4x, assuming you use a discount rate of 7.9%.
Given the current share price of $85.04, the analyst price target of $116.81 is 27.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

RVTY: Operating Margins And Buyback Plan Will Drive Share Recovery Ahead