Avantor (NYSE:AVTR) - Share price, News & Analysis

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

AVTR ($31.61) is trading above our estimate of [[fair value]] ($27.06)

AVTR fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	5/6
Financial Health	3/6
Dividends	0/6

AVTR Stock Overview

Rewards

Earnings are forecast to grow 22.97% per year

Earnings grew by 216.2% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Avantor Competitors

Waters

NYSE:WAT

US$20.3b

Mettler-Toledo International

NYSE:MTD

US$26.4b

West Pharmaceutical Services

NYSE:WST

US$22.8b

PerkinElmer

NYSE:PKI

US$18.2b

Price History & Performance

Summary of all time highs, changes and price drops for Avantor
Historical stock prices
Current Share Price	US$31.61
52 Week High	US$44.37
52 Week Low	US$28.64
Beta	1.53
1 Month Change	-3.27%
3 Month Change	-0.032%
1 Year Change	-10.61%
3 Year Change	66.63%
5 Year Change	n/a
Change since IPO	118.00%

Recent News & Updates

Jun 20

Here's Why Avantor (NYSE:AVTR) Can Manage Its Debt Responsibly

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

May 20

Avantor: Narrowing The Relative Valuation Gap

Avantor’s pricing power has allowed it to outpace the inflationary headwinds. Cash flow remains strong, and thus, the balance sheet deleveraging is on track, allowing for future M&A optionality. The stock trades below peers, but should converge over time as the company unlocks its earnings growth potential.

May 15

I Ran A Stock Scan For Earnings Growth And Avantor (NYSE:AVTR) Passed With Ease

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

	AVTR	US Life Sciences	US Market
7D	-1.2%	0.08%	-2.2%
1Y	-10.6%	-17.5%	-19.1%

Return vs Industry: AVTR exceeded the US Life Sciences industry which returned -17.5% over the past year.

Return vs Market: AVTR exceeded the US Market which returned -21.2% over the past year.

Price Volatility

Is AVTR's price volatile compared to industry and market?
AVTR volatility
AVTR Average Weekly Movement	5.8%
Life Sciences Industry Average Movement	11.4%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.3%

Stable Share Price: AVTR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: AVTR's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1904	13,500	Michael Stubblefield	https://www.avantorsciences.com

Avantor, Inc. provides products and services to customers in biopharma, healthcare, education and government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa. The company offers materials and consumables, such as purity chemicals and reagents, lab products and supplies, formulated silicone materials, customized excipients, customized single-use assemblies, process chromatography resins and columns, analytical sample prep kits, education and microbiology products, clinical trial kits, peristaltic pumps, and fluid handling tips. It also provides equipment and instrumentation products, including filtration systems, virus inactivation systems, incubators, analytical instruments, evaporators, ultra-low-temperature freezers, biological safety cabinets, and critical environment supplies.

Avantor Fundamentals Summary

How do Avantor's earnings and revenue compare to its market cap?
AVTR fundamental statistics
Market Cap	US$19.29b
Earnings (TTM)	US$534.40m
Revenue (TTM)	US$7.55b

36.1x

P/E Ratio

2.6x

P/S Ratio

Is AVTR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AVTR income statement (TTM)
Revenue	US$7.55b
Cost of Revenue	US$4.97b
Gross Profit	US$2.58b
Other Expenses	US$2.05b
Earnings	US$534.40m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 28, 2022

Earnings per share (EPS)	0.88
Gross Margin	34.17%
Net Profit Margin	7.08%
Debt/Equity Ratio	155.8%

How did AVTR perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

0/6

Valuation Score 0/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AVTR. This is calculated by dividing AVTR's market cap by their current preferred multiple.
What is AVTR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$19.29b

AVTR 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	3.6x
Enterprise Value/EBITDA	17.7x
PEG Ratio	1.6x

Price to Earnings Ratio vs Peers

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

AVTR PE Ratio vs Peers

The above table shows the PE ratio for AVTR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30x
WAT Waters	28.8x	6.1%	US$20.3b
MTD Mettler-Toledo International	33.2x	7.9%	US$26.4b
WST West Pharmaceutical Services	33.3x	9.2%	US$22.8b
PKI PerkinElmer	24.5x	0.6%	US$18.2b
AVTR Avantor	36.1x	23.0%	US$19.3b

Forward PE

Price-To-Earnings vs Peers: AVTR is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the peer average (30x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: AVTR is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the US Life Sciences industry average (30.3x)

Price to Earnings Ratio vs Fair Ratio

What is AVTR'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.

AVTR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	36.1x
Fair PE Ratio	28.7x

Price-To-Earnings vs Fair Ratio: AVTR is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the estimated Fair Price-To-Earnings Ratio (28.7x).

Share Price vs Fair Value

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

Below Fair Value: AVTR ($31.61) is trading above our estimate of fair value ($27.06)

Significantly Below Fair Value: AVTR is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: AVTR is poor value based on its PEG Ratio (1.6x)

Discover undervalued companies

Future Growth

How is Avantor forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

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

23.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVTR's forecast earnings growth (23% per year) is above the savings rate (1.9%).

Earnings vs Market: AVTR's earnings (23% per year) are forecast to grow faster than the US market (13.6% per year).

High Growth Earnings: AVTR's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AVTR's revenue (6.3% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: AVTR's revenue (6.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AVTR's Return on Equity is forecast to be high in 3 years time (21.9%)

Discover growth companies

Past Performance

How has Avantor performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

83.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AVTR has high quality earnings.

Growing Profit Margin: AVTR's current net profit margins (7.1%) are higher than last year (2.5%).

Past Earnings Growth Analysis

Earnings Trend: AVTR has become profitable over the past 5 years, growing earnings by 83.6% per year.

Accelerating Growth: AVTR's earnings growth over the past year (216.2%) exceeds its 5-year average (83.6% per year).

Earnings vs Industry: AVTR earnings growth over the past year (216.2%) exceeded the Life Sciences industry 21%.

Return on Equity

High ROE: AVTR's Return on Equity (13.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Avantor's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

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

Financial Position Analysis

Short Term Liabilities: AVTR's short term assets ($2.6B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: AVTR's short term assets ($2.6B) do not cover its long term liabilities ($8.0B).

Debt to Equity History and Analysis

Debt Level: AVTR's net debt to equity ratio (149.3%) is considered high.

Reducing Debt: AVTR had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: AVTR's debt is not well covered by operating cash flow (14.4%).

Interest Coverage: AVTR's interest payments on its debt are well covered by EBIT (4.6x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Avantor 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

0.042%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate AVTR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate AVTR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if AVTR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AVTR's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as AVTR has not reported any payouts.

Discover strong dividend paying companies

Management

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

3.8yrs

Average management tenure

CEO

Michael Stubblefield (49 yo)

8.5yrs

Tenure

US$13,260,913

Compensation

Mr. Michael Stubblefield has been President, Chief Executive Officer and Director of Avantor, Inc. since 2014. Mr. Stubblefield has been the Chief Executive Officer of Avantor Performance Materials LLC. si...

CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD13.26M) is about average for companies of similar size in the US market ($USD13.34M).

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

Leadership Team

Experienced Management: AVTR's management team is considered experienced (3.8 years average tenure).

Board Members

Experienced Board: AVTR's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.

Ownership

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

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.8%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31