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Today we're going to take a look at the well-established Thermo Fisher Scientific Inc. (NYSE:TMO). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$599 at one point, and dropping to the lows of US$538. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Thermo Fisher Scientific's current trading price of US$545 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Thermo Fisher Scientific’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Thermo Fisher Scientific
What's The Opportunity In Thermo Fisher Scientific?
The stock is currently trading at US$545 on the share market, which means it is overvalued by 40% compared to our intrinsic value of $389.51. Not the best news for investors looking to buy! In addition to this, it seems like Thermo Fisher Scientific’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Thermo Fisher Scientific look like?
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. 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 36% over the next couple of years, the future seems bright for Thermo Fisher Scientific. 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? TMO’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe TMO 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.