MMarketMath

TMO

StalwartQuality: Medium (62/100)1 red flag

Thermo Fisher Scientific · Health Care · Life Sciences Tools & Services

$628.74

52w 435.27 – 643.99

20y monthly, adjusted

Mkt cap

$232.5B

P/E

33.8

P/FCF

36.0

FCF yield

2.8%

ROE

12.6%

Shldr yield

1.6%

div 0.3% + bb 1.3%

What today's price assumes

At $232.5B, the market is pricing in 15.7% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 9.6% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $259 · $391 · $487 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 20.1× across 19 years, TMO would trade near $425/share (25th–75th percentile: $310–$515); it trades at 29.7× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−0.3%

Rev 5y

+6.7%

Rev 10y

+10.1%

EPS 5y

+2.1%

EPS 10y

+13.7%

FCF 5y

−1.6%

FCF 10y

+9.6%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $9.7B
2008: $10.5B
2009: $9.9B
2010: $10.4B
2011: $11.6B
2012: $12.5B
2013: $13.1B
2014: $16.9B
2015: $17.0B
2016: $18.3B
2017: $20.9B
2018: $24.4B
2019: $25.5B
2020: $32.2B
2021: $39.2B
2022: $44.9B
2023: $42.9B
2024: $42.9B
2025: $44.6B
$0$20.0B$40.0B
07
11
15
19
23

Net income

2007: $748.4M
2008: $980.9M
2009: $850.3M
2010: $1.0B
2011: $1.3B
2012: $1.2B
2013: $1.3B
2014: $1.9B
2015: $2.0B
2016: $2.0B
2017: $2.2B
2018: $2.9B
2019: $3.7B
2020: $6.4B
2021: $7.7B
2022: $7.0B
2023: $6.0B
2024: $6.3B
2025: $6.7B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Free cash flow

2007: $1.3B
2008: $1.2B
2009: $1.5B
2010: $1.3B
2011: $1.4B
2012: $1.7B
2013: $1.7B
2014: $2.2B
2015: $2.5B
2016: $2.8B
2017: $3.5B
2018: $3.8B
2019: $4.0B
2020: $6.8B
2021: $6.8B
2022: $6.9B
2023: $6.9B
2024: $7.3B
2025: $6.3B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Diluted shares (lower is better)

2007: 443.6M
2008: 434.7M
2009: 422.8M
2010: 409.4M
2011: 384.8M
2012: 366.6M
2013: 365.8M
2014: 402.3M
2015: 402.0M
2016: 397.0M
2017: 398.0M
2018: 406.0M
2019: 403.0M
2020: 399.0M
2021: 397.0M
2022: 394.0M
2023: 388.0M
2024: 383.0M
2025: 378.0M
0200.0M400.0M
07
11
15
19
23

Margins

10%15%20%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $898.0M
2008: $187.4M
2009: $414.6M
2010: $1.0B
2011: $1.3B
2012: $1.3B
2013: $306.0M
2014: $234.8M
2015: $741.0M
2016: $1.5B
2017: $987.0M
2018: $766.0M
2019: $1.8B
2020: $1.8B
2021: $2.4B
2022: $3.5B
2023: $3.5B
2024: $4.6B
2025: $3.6B
$0$2.0B$4.0B
07
11
15
19
23

Cash vs long-term debt

$0$20.0B$40.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $10.7B
Q3'23: $10.6B
Q4'23: $10.9B
Q1'24: $10.3B
Q2'24: $10.5B
Q3'24: $10.6B
Q4'24: $11.4B
Q1'25: $10.4B
Q2'25: $10.9B
Q3'25: $11.1B
Q4'25: $12.2B
Q1'26: $11.0B
Q2'26: $12.0B
$0$5.0B$10.0B
23
24
24
25
26

Net income by quarter

Q2'23: $1.4B
Q3'23: $1.7B
Q4'23: $1.6B
Q1'24: $1.3B
Q2'24: $1.5B
Q3'24: $1.6B
Q4'24: $1.8B
Q1'25: $1.5B
Q2'25: $1.6B
Q3'25: $1.6B
Q4'25: $2.0B
Q1'26: $1.7B
Q2'26: $1.7B
$0$500.0M$1.0B$1.5B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$12.0B+10.5%$1.7B+7.4%4.68$2.1B
Q1'26$11.0B+6.2%$1.7B+9.6%4.43$1.2B
Q4'25 *$12.2B+7.2%$2.0B+7.6%5.21$3.5B
Q3'25$11.1B+4.9%$1.6B−0.9%4.27$2.2B
Q2'25$10.9B+3.0%$1.6B+4.5%4.28$1.4B
Q1'25$10.4B+0.2%$1.5B+13.2%3.98$723.0M
Q4'24 *$11.4B+4.7%$1.8B+10.9%4.78$3.3B
Q3'24$10.6B+0.2%$1.6B−3.8%4.25$2.2B
Q2'24$10.5B−1.4%$1.5B+13.7%4.04$2.0B
Q1'24$10.3B−3.4%$1.3B+3.0%3.46$1.3B
Q4'23 *$10.9B−4.9%$1.6B+4.6%4.20$3.7B
Q3'23$10.6B−1.0%$1.7B+13.2%4.42$2.4B
Q2'23$10.7B−2.6%$1.4B−18.3%3.51$1.5B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−0.3%+6.7%+10.1%+10.2%
Operating cash flow−5.1%−1.2%+10.3%+11.6%
Free cash flow−3.1%−1.6%+9.6%+11.4%
EPS (diluted)+0.2%+2.1%+13.7%+13.9%
Equity+6.7%+9.1%+9.6%+8.7%
LT debt+4.5%+15.4%+13.1%+21.8%
Diluted shares−1.4%−1.1%−0.6%−0.5%
Stock price+4.4%+2.8%+15.6%+18.1%

$100, 3 years ago

$114vs $176 in SPY

4.4% vs 20.7%/yr

$100, 5 years ago

$115vs $181 in SPY

2.8% vs 12.6%/yr

$100, 10 years ago

$425vs $412 in SPY

15.6% vs 15.2%/yr

$100, 15 years ago

$1,211vs $813 in SPY

18.1% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$0.58

$18.0B created / $31.1B retained

Last 10 years

$3.55

$166.8B created / $47.0B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

8.4%

OCF ÷ (equity + debt)

OCF / EV yield

3.1%

MC vs 10× OCF

2.90

≤1 = priced under 10× OCF

Debt / FCF

6.2y

SBC / FCF

4.9%

Owner earnings

$6.0B

OCF − capex − SBC

OE yield

2.6%

Share count 5y

−0.9%

per year; negative = buybacks

Capital intensity

23.7%

net PP&E ÷ revenue

Sales efficiency

$0.38

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 91.0% of operating cash flow at an incremental return of -1.2% — an organically fundable growth rate of about -1.1% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

15 of 26 checks pass · 58%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    6.7% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    2.1% · 5y CAGR ≥ 5%

    fail

  • FCF growth

    -1.6% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    8 of 9 · up in ≥ 7 of last 10 years

    pass

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    -1.2% vs 6.7% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

5/6

  • Net margin

    15.0% · ≥ 8%

    pass

  • Operating margin

    17.4% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    12.6% · ≥ 12%

    pass

  • Cash ROIC

    8.4% · ≥ 12%

    fail

  • FCF margin

    14.1% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $7.8B vs NI $6.7B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

2/5

  • Debt payable from cash flow

    6.2y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    25% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.73 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $53.4B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    18% · interest ≤ 15% of operating income

    fail

Capital Allocation

4/4

  • Share count flat or shrinking

    -0.9% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    5% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    58% · dividends + buybacks ≤ 100% of FCF

    pass

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

0/4

  • FCF yield

    2.8% · ≥ 3%

    fail

  • Earnings multiple

    33.8 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    15.7% vs 9.6% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    1.6% · dividends + buybacks ≥ 2% of market cap

    fail

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202544,556—7,7466,70417.747,8181,5256,2936363,0003109,85239,17253,407378
202442,879—7,3376,33516.538,6671,4007,2675834,0003014,00931,07249,584383
202342,857—6,8595,99515.458,4061,4796,9275233,0002788,07734,72746,735388
202244,915—8,3936,96017.639,1542,2436,9114553,0003078,52434,27843,978394
202139,211—10,0287,72819.469,3122,5236,7893952,0002304,47734,67040,793397
202032,218—7,7946,37715.968,2891,4746,8153371,50019610,32519,10734,507399
201925,542—4,5943,6989.174,9739264,0472971,5001812,39917,07629,675403
201824,358—3,7832,9387.244,5437583,7852665001812,10317,71927,586406
201720,918—2,9602,2255.594,0055083,4972377501591,33518,87325,413398
201618,274—2,4582,0225.093,2584442,8142381,25013378615,37221,540397
201516,965—2,3361,9754.922,9424232,51924150012545211,42021,350402
201416,890—2,5031,8944.712,6204282,19223501171,34412,35220,548402
201313,090—1,6101,2733.482,0112821,72821690915,8269,50016,856366
201212,510—1,4821,1783.212,0403151,7241421,150788067,03115,465367
201111,559—1,2511,3303.461,6912611,43001,338801,0165,75515,038385
201010,393—1,1881,0362.531,4982451,252—1,013829172,03115,361409
20099,912—1,0028502.011,6592001,459—415671,5642,06415,431423
200810,498—1,2299812.251,4202641,156—187571,2812,00314,927435
20079,746—9747481.691,4841761,308—89851625—14,464444

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗