Stock Analysis

Why Bio-Rad Laboratories, Inc. (NYSE:BIO) Could Be Worth Watching

Published
NYSE:BIO
Source: Shutterstock

Today we're going to take a look at the well-established Bio-Rad Laboratories, Inc. (NYSE:BIO). The company's stock saw a decent share price growth in the teens level 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? Let’s examine Bio-Rad Laboratories’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Bio-Rad Laboratories

Is Bio-Rad Laboratories Still Cheap?

According to my valuation model, Bio-Rad Laboratories seems to be fairly priced at around 1.7% below my intrinsic value, which means if you buy Bio-Rad Laboratories today, you’d be paying a fair price for it. And if you believe that the stock is really worth $410.71, then there’s not much of an upside to gain from mispricing. What's more, Bio-Rad Laboratories’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Bio-Rad Laboratories generate?

earnings-and-revenue-growth
NYSE:BIO Earnings and Revenue Growth December 8th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 90% over the next year, the near-term future seems bright for Bio-Rad Laboratories. 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? BIO’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on BIO, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Bio-Rad Laboratories at this point in time. At Simply Wall St, we found 1 warning sign for Bio-Rad Laboratories and we think they deserve your attention.

If you are no longer interested in Bio-Rad Laboratories, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

Find out whether Bio-Rad Laboratories is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis