Agilent Technologies (NYSE:A) - Share price, News & Analysis

Q: What is the Fair Price of A when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

A ($132.77) is trading below our estimate of [[fair value]] ($145.25)

A fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	6/6
Financial Health	5/6
Dividends	0/6

A Stock Overview

Agilent Technologies, Inc. provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide.

Rewards

Trading at 8.6% below our estimate of its fair value

Earnings are forecast to grow 9.69% per year

Earnings grew by 36.5% over the past year

Risk Analysis

Significant insider selling over the past 3 months

Agilent Technologies Competitors

IQVIA Holdings

NYSE:IQV

US$45.6b

Mettler-Toledo International

NYSE:MTD

US$30.5b

West Pharmaceutical Services

NYSE:WST

US$24.7b

Avantor

NYSE:AVTR

US$19.0b

Price History & Performance

Summary of all time highs, changes and price drops for Agilent Technologies
Historical stock prices
Current Share Price	US$132.77
52 Week High	US$179.57
52 Week Low	US$112.52
Beta	1.06
1 Month Change	11.73%
3 Month Change	9.92%
1 Year Change	-17.49%
3 Year Change	86.68%
5 Year Change	110.88%
Change since IPO	210.57%

Recent News & Updates

Aug 11

Agilent Technologies: Turning Bullish Ahead Of Q3 Earnings

Agilent is set to report its fiscal Q3 earnings on August 16th. Shares have been under pressure all year amid broader macro headwinds, despite continued growth and earnings momentum. We like the stock following the correction with its outlook supported by significant long-term growth opportunities. Agilent Technologies, Inc. (A) is a leader in analytical instrumentation and specialized software for life sciences and applied chemical markets. The tools here allow for the analysis of samples at the molecular level with applications in everything from pharmaceuticals, biotech, industrial materials, energy, and food sciences. We last covered the stock about one year ago, highlighting Agilent Tech as a high-quality blue chip checking off all the boxes between solid fundamentals, earnings growth, and significant long-term opportunities. That being said, shares haven't been immune to the market volatility, down nearly 20% over the past year. A pullback in expectations amid macro headwinds compared to what was likely peak optimism last year has driven a reset of valuation. We can also point to the company's exposure to China, adding a layer of uncertainty. Still, we like the stock ahead of the upcoming quarterly report this month, with the recent selloff setting up a new buying opportunity. We see shares of Agilent as well-positioned to recover into an improving macro environment and outperform the market to the upside. We'll recap some of the latest developments and share our thought for the year ahead. Agilent Q3 Earnings Preview Agilent Technologies is set to report its fiscal Q3 earnings on Tuesday, August 16, after the market close. The current EPS consensus at $1.21, if confirmed, would represent a 9% increase over the period last year. The market is also forecasting revenue at $1.6 billion, a 3% increase over Q3 2021. Notably, both of these figures are in line with management guidance from the last quarterly report. Seeking Alpha When looking at these trends, it's clear that 3% sales growth isn't much to get excited about and explains some of the weaknesses in the stock over the past year. For context, revenue growth in Q3 2021 was a much stronger 26% which results in a tough comparison period for this report. On the other hand, the outlook for earnings to climb ahead of sales implies expanding margins as a point. In Q2, EPS last quarter climbed 16% to $1.13 ahead of a 7% increase in sales, with management citing continued demand strength despite some macro headwinds. source: company IR The Q2 operating margin at 25.3%, up 140 basis points y/y has likely been the most positive development for the company in recent quarters. The dynamic reflects strong momentum from its "Diagnostics and Genomics Group", as the strongest segment of the business, where revenues climbed 14% y/y in Q2. (DGG) benefiting from demand for nucleic acid active pharmaceutical ingredients within the Pharma & Biotech end market, adding to profitability. There is some expectation for this runway to continue. source: company IR We mentioned China being a question mark. For Agilent, China currently represents around 20% of its total sales, across all product segments. This follows 2021 growth in the country at 55% y/y highlighting the importance of the region. Agilent has expanded partnerships with local pharma companies to drive diagnostics opportunities while also investing in local manufacturing. The uncertainty here is that the Chinese economy has been reporting some mixed economic data, below expectations, including disruptions from a wave of Covid lockdowns in the first half of the year. A key theme in this upcoming quarterly earnings report will be how its operations in the Asia-Pacific region are performing amid these headwinds. We got an update from Agilent in June during a June investor conference event where management highlighted that while the Covid shutdown ended up deferring revenues, some of that business out of China will start to get recognized going forward, apparently into Q3 and Q4. From the event transcript: Our order book continued to be very strong, double-digit growth for the quarter, outpacing revenue growth. As you know, we've had a level of revenue deferral in China because of a shutdown. That's going to be in the P&L in the coming quarters. End markets are strong, and we feel really good about the health of the business. It's worth mentioning that Agilent Technologies has strung together an impressive streak of beating earnings expectations, with a positive surprise on the EPS side every quarter since at least Q3 2019. A scenario where the operating environment in China recovered more quickly than expected is one reason the Q3 report could come in strong through some top-line momentum. Seeking Alpha Is Agilent A Good Long-Term Investment? There's a lot to like about Agilent Technologies, with its core products representing the backbone of innovation in high-growth markets like BioPharma, diagnostics, and even applied materials. Simply put, customers require Agilent equipment and consumables to run laboratory workflow as part of research and development. This includes cancer research and emerging technologies like CRISPR therapeutic programs. Beyond the macro headwinds this year, these are markets where we expect long-term growth to continue. source: company IR According to consensus estimates, the forecast for full-year revenue is to reach $6.7 billion, up 6% y/y. The EPS estimate at $4.89, up 13% y/y is at the midpoint of management guidance for fiscal 2022. The outlook for top-line growth to average 5% to 7% through 202, follows the expectation that the core addressable markets have a similar long-term trend. What's more encouraging here is the trend for earnings to climb even higher, averaging around 10% annual growth over the period. Seeking Alpha As it relates to valuation, Agilent trades at a forward P/E of 27x which curiously is near the average for a group of competitors between Danaher Corp. (DHR), PerkinElmer, Inc. (PKI), Thermo Fisher Scientific Inc. (TMO), and Waters Corp. (WAT) which offer alternative solutions in life sciences.

Aug 02

Agilent Technologies acquires Polymer Standards Service; terms undisclosed

Agilent Technologies (NYSE:A) said Tuesday it acquired Polymer Standards Service (PSS); financial terms were not disclosed. PSS specializes in hardware and software solutions used in defining the makeup and creation of molecular structures. The acquisition expands A's product portfolio and customer offerings, particularly in chemical and biopharmaceutical industries for analysis of natural and synthetic polymers. A will also add a key software component to complement its gel permeation chromatography/size exclusion chromatography product portfolio. A's global presence will help to expand the use of PSS products and expertise more widely.

Jul 31

Calculating The Fair Value Of Agilent Technologies, Inc. (NYSE:A)

How far off is Agilent Technologies, Inc. ( NYSE:A ) from its intrinsic value? Using the most recent financial data...

Jul 18

Is It Too Late To Consider Buying Agilent Technologies, Inc. (NYSE:A)?

Let's talk about the popular Agilent Technologies, Inc. ( NYSE:A ). The company's shares received a lot of attention...

Shareholder Returns

	A	US Life Sciences	US Market
7D	3.0%	3.9%	4.5%
1Y	-17.5%	-20.8%	-8.9%

Return vs Industry: A exceeded the US Life Sciences industry which returned -19.7% over the past year.

Return vs Market: A underperformed the US Market which returned -9.6% over the past year.

Price Volatility

Is A's price volatile compared to industry and market?
A volatility
A Average Weekly Movement	5.0%
Life Sciences Industry Average Movement	11.0%
Market Average Movement	7.6%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.1%

Stable Share Price: A is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: A's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1999	17,400	Mike McMullen	https://www.agilent.com

Agilent Technologies, Inc. provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. The Life Sciences and Applied Markets segment offers liquid chromatography systems and components; liquid chromatography mass spectrometry systems; gas chromatography systems and components; gas chromatography mass spectrometry systems; inductively coupled plasma mass spectrometry instruments; atomic absorption instruments; microwave plasma-atomic emission spectrometry instruments; inductively coupled plasma optical emission spectrometry instruments; raman spectroscopy; cell analysis plate based assays; flow cytometer; real-time cell analyzer; cell imaging systems; microplate reader; laboratory software; information management and analytics; laboratory automation and robotic systems; dissolution testing; vacuum pumps, and measurement technologies. The Diagnostics and Genomics segment provides arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling, gene expression profiling, next generation sequencing, target enrichment and genetic data management, and interpretation support software; and produces synthesized oligonucleotide.

Agilent Technologies Fundamentals Summary

How do Agilent Technologies's earnings and revenue compare to its market cap?
A fundamental statistics
Market Cap	US$39.66b
Earnings (TTM)	US$1.26b
Revenue (TTM)	US$6.53b

31.4x

P/E Ratio

6.1x

P/S Ratio

Is A overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
A income statement (TTM)
Revenue	US$6.53b
Cost of Revenue	US$3.00b
Gross Profit	US$3.52b
Other Expenses	US$2.26b
Earnings	US$1.26b

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

Aug 16, 2022

Earnings per share (EPS)	4.23
Gross Margin	53.97%
Net Profit Margin	19.35%
Debt/Equity Ratio	56.7%

How did A perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

19%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is A undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for A?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for A. This is calculated by dividing A's market cap by their current preferred multiple.
What is A's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$39.66b

A key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.4x
Enterprise Value/EBITDA	22.5x
PEG Ratio	3.2x

Price to Earnings Ratio vs Peers

How does A's PE Ratio compare to its peers?

A PE Ratio vs Peers

The above table shows the PE ratio for A vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	36.5x
IQV IQVIA Holdings	39.3x	18.5%	US$45.6b
MTD Mettler-Toledo International	37.2x	9.0%	US$30.5b
WST West Pharmaceutical Services	36.1x	9.0%	US$24.7b
AVTR Avantor	33.2x	21.6%	US$19.0b
A Agilent Technologies	31.4x	9.7%	US$39.7b

Price-To-Earnings vs Peers: A is good value based on its Price-To-Earnings Ratio (31.4x) compared to the peer average (36.5x).

Price to Earnings Ratio vs Industry

How does A's PE Ratio compare vs other companies in the US Life Sciences Industry?

Price-To-Earnings vs Industry: A is good value based on its Price-To-Earnings Ratio (31.4x) compared to the US Life Sciences industry average (32.7x)

Price to Earnings Ratio vs Fair Ratio

What is A's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

A PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	31.4x
Fair PE Ratio	25.8x

Price-To-Earnings vs Fair Ratio: A is expensive based on its Price-To-Earnings Ratio (31.4x) compared to the estimated Fair Price-To-Earnings Ratio (25.8x).

Share Price vs Fair Value

What is the Fair Price of A when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: A ($132.77) is trading below our estimate of fair value ($145.25)

Significantly Below Fair Value: A is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Agilent Technologies forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: A's forecast earnings growth (9.7% per year) is above the savings rate (1.9%).

Earnings vs Market: A's earnings (9.7% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: A's earnings are forecast to grow, but not significantly.

Revenue vs Market: A's revenue (6.4% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: A's revenue (6.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: A's Return on Equity is forecast to be high in 3 years time (27.9%)

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Past Performance

How has Agilent Technologies performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

18.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: A has high quality earnings.

Growing Profit Margin: A's current net profit margins (19.4%) are higher than last year (15.9%).

Past Earnings Growth Analysis

Earnings Trend: A's earnings have grown by 18.1% per year over the past 5 years.

Accelerating Growth: A's earnings growth over the past year (36.5%) exceeds its 5-year average (18.1% per year).

Earnings vs Industry: A earnings growth over the past year (36.5%) exceeded the Life Sciences industry 15.6%.

Return on Equity

High ROE: A's Return on Equity (24.7%) is considered high.

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Financial Health

How is Agilent Technologies's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: A's short term assets ($3.6B) exceed its short term liabilities ($1.8B).

Long Term Liabilities: A's short term assets ($3.6B) exceed its long term liabilities ($3.5B).

Debt to Equity History and Analysis

Debt Level: A's net debt to equity ratio (33.2%) is considered satisfactory.

Reducing Debt: A's debt to equity ratio has increased from 46.7% to 56.7% over the past 5 years.

Debt Coverage: A's debt is well covered by operating cash flow (45.2%).

Interest Coverage: A's interest payments on its debt are well covered by EBIT (18.7x coverage).

Balance Sheet

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Dividend

What is Agilent Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.63%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: A's dividend (0.63%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: A's dividend (0.63%) is low compared to the top 25% of dividend payers in the US market (3.96%).

Stability and Growth of Payments

Stable Dividend: A is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: A is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: A is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: A is not paying a notable dividend for the US market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.3yrs

Average management tenure

CEO

Mike McMullen (61 yo)

7.92yrs

Tenure

US$15,967,631

Compensation

Mr. Michael R. McMullen, also known as Mike, has been the President of Agilent Technologies, Inc., since September 17, 2014 and Chief Executive Officer since March 18, 2015. Mr. McMullen has been a Directo...

CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD15.97M) is about average for companies of similar size in the US market ($USD12.87M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: A's management team is seasoned and experienced (7.3 years average tenure).

Board Members

Experienced Board: A's board of directors are considered experienced (6.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: A insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/04/30
Annual Earnings	2021/10/31