Stock Analysis

What Is Avantor, Inc.'s (NYSE:AVTR) Share Price Doing?

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NYSE:AVTR
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Today we're going to take a look at the well-established Avantor, Inc. (NYSE:AVTR). The company's stock received a lot of attention from a substantial price increase on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Avantor’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Avantor

Is Avantor still cheap?

According to my valuation model, the stock is currently overvalued by about 33%, trading at US$33.47 compared to my intrinsic value of $25.21. This means that the opportunity to buy Avantor at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Avantor’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Avantor look like?

earnings-and-revenue-growth
NYSE:AVTR Earnings and Revenue Growth June 11th 2021

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Avantor. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in AVTR’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe AVTR should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on AVTR for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for AVTR, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 3 warning signs for Avantor (1 is a bit concerning!) and we strongly recommend you look at these before investing.

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Valuation is complex, but we're helping make it simple.

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