Education
About Us
Working with TipRanks
Follow Us
Avantor Inc (AVTR)
NYSE:AVTR
Top Page
Avantor
(NYSE:AVTR)
66Neutral
Positive Factors
Cost Management
Over-delivering on cost-out actions and achieving 121% FCF conversion and solid deleveraging provide a positive backdrop for the Buy thesis.
Financial Performance
Avantor's organic growth rate of change and Y/Y EPS growth are at the high end compared to its peers.
Valuation
Avantor offers an attractive investment opportunity due to its discounted valuation compared to peers, which has historically led to material outperformance.
Negative Factors
Guidance and Expectations
Avantor's guidance for core growth fell short at the midpoint, coming in just below expectations compared to peers.
Lab Solutions Performance
Lab Solutions segment saw organic growth decline and profitability deteriorate, missing street expectations.
Laboratory Solutions Weakness
Weakness in Avantor’s Laboratory Solutions business was the big concern this quarter: The segment missed expectations and quarterly guidance, and declined YoY.
Avantor (AVTR) vs. S&P 500 (SPY)
Market Cap
$10.76B
Dividend YieldN/A
Average Volume (3M)7.70M
Price to Earnings (P/E)15.6
Beta (1Y)0.72
Revenue Growth-2.64%
EPS Growth120.05%
CountryUS
Employees13,500
SectorBasic Materials
Sector Strength60
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.04
Shares Outstanding680,902,600
10 Day Avg. Volume6,428,141
30 Day Avg. Volume7,698,681
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)N/A
Price to Sales (P/S)1.66
Price to Cash Flow (P/CF)16.30
P/FCF Ratio19.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$24.43Price Target Upside49.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Avantor Business Overview & Revenue Model
Company DescriptionAvantor, 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. In addition, the company offers services and specialty procurements comprising onsite lab and production, clinical, equipment, procurement and sourcing, and biopharmaceutical material scale-up and development services. Avantor, Inc. was founded in 1904 and is headquartered in Radnor, Pennsylvania.
How the Company Makes MoneyAvantor makes money through the sale of its diverse range of products and services that cater to various industries, particularly in the life sciences, advanced technologies, and applied materials sectors. The company's revenue streams primarily include sales of chemicals, laboratory equipment, and consumables used in research and production processes. Avantor benefits from long-term relationships and contracts with institutions, healthcare providers, and technology companies, which help ensure a steady flow of revenue. Additionally, Avantor engages in strategic partnerships and acquisitions to enhance its product offerings and expand its market reach, further contributing to its earnings.
Avantor Financial Statement Overview
Summary
Avantor exhibits mixed financial performance with improved profit margins and reduced leverage, but faces challenges with revenue decline and asset shrinkage. They maintain solid cash flow management, though growth in free cash flow is slowing.Income Statement
The company demonstrates mixed revenue growth with a decline from $7,512 million in 2022 to $6,967 million in 2023, and an absence of revenue in 2024. Despite this, the net profit margin has improved significantly from 4.6% in 2022 to 10.2% in 2023, indicating better cost control or pricing strategies. Gross profit margin data is unavailable for 2024, limiting further analysis.62
Positive
Balance Sheet
Avantor's balance sheet reflects a stable financial structure with a consistent increase in stockholders' equity from $4,197 million in 2021 to $5,957 million in 2024, improving the equity ratio. The debt-to-equity ratio fell from 1.67 in 2021 to 0.14 in 2024, indicating a strong reduction in leverage. However, the shrinking total assets from $13,897 million in 2021 to $12,114 million in 2024 could limit growth potential.70
Positive
Cash Flow
The cash flow statement reveals a robust operating cash flow to net income ratio, which improved from 1.23 in 2021 to 1.18 in 2024. Free cash flow increased from $723.6 million in 2023 to $692 million in 2024, demonstrating efficient capital expenditure management. However, the free cash flow growth rate has slowed, suggesting potential pressures on future cash availability.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.78B | 6.97B | 7.51B | 7.39B | 6.39B | Gross Profit |
| 2.28B | 2.36B | 2.60B | 2.50B | 2.08B | EBIT |
| 1.08B | 696.40M | 1.13B | 972.20M | 706.80M | EBITDA |
| 1.08B | 1.13B | 1.53B | 1.35B | 765.30M | Net Income Common Stockholders |
| 711.50M | 321.10M | 686.50M | 572.60M | 116.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 261.90M | 262.90M | 372.90M | 301.70M | 286.60M | Total Assets |
| 12.11B | 12.97B | 13.46B | 13.90B | 9.91B | Total Debt |
| 821.10M | 5.54B | 6.29B | 7.02B | 4.89B | Net Debt |
| 559.20M | 5.27B | 5.91B | 6.72B | 4.61B | Total Liabilities |
| 6.16B | 7.72B | 8.61B | 9.70B | 7.23B | Stockholders Equity |
| 5.96B | 5.25B | 4.86B | 4.20B | 2.67B |
| Cash Flow | Free Cash Flow | |||
| 692.00M | 723.60M | 710.20M | 842.50M | 868.20M | Operating Cash Flow |
| 840.80M | 870.00M | 843.60M | 953.60M | 929.80M | Investing Cash Flow |
| 438.90M | -143.70M | -109.60M | -4.12B | -59.10M | Financing Cash Flow |
| -1.28B | -843.70M | -648.70M | 3.22B | -782.90M |
Avantor Technical Analysis
Negative
16.29
Price Trends
18.12
Negative
19.83
Negative
21.98
Negative
Market Momentum
-0.50
Negative
36.68
Neutral
21.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVTR, the sentiment is Negative. The current price of 16.29 is below the 20-day moving average (MA) of 16.43, below the 50-day MA of 18.12, and below the 200-day MA of 21.98, indicating a bearish trend. The MACD of -0.50 indicates Negative momentum. The RSI at 36.68 is Neutral, neither overbought nor oversold. The STOCH value of 21.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVTR.
Avantor Risk Analysis
Avantor disclosed 35 risk factors in its most recent earnings report. Avantor reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Avantor Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $24.10B | 28.93 | -680.23% | ― | 2.22% | 12.78% | |
70 Outperform | $187.73B | 30.08 | 13.15% | 0.33% | 0.05% | 6.87% | |
68 Neutral | $33.35B | 26.88 | 20.61% | 0.84% | -3.00% | 3.67% | |
66 Neutral | $10.76B | 15.63 | 12.69% | ― | -2.64% | 120.05% | |
65 Neutral | $146.67B | 38.76 | 7.57% | 0.56% | -13.50% | -17.25% | |
49 Neutral | $12.57B | ― | -30.11% | ― | -2.93% | -4.69% | |
47 Neutral | $2.64B | -3.21 | -21.68% | 3.30% | 4.19% | -30.23% |
* Basic Materials Sector Average
Performance Comparison
AVTR
Avantor
16.29
-9.00
-35.59%
A
Agilent
115.99
-26.68
-18.70%
DHR
Danaher
205.16
-38.02
-15.63%
ILMN
Illumina
81.88
-42.26
-34.04%
MTD
Mettler-Toledo
1,172.50
-158.27
-11.89%
TMO
Thermo Fisher
489.06
-85.27
-14.85%
Avantor Earnings Call Summary
Earnings Call Date: Feb 7, 2025 | % Change Since: -24.93% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in bioprocessing and impressive free cash flow generation, alongside successful debt reduction and product innovation. However, these positive trends were tempered by an organic revenue decline, challenges in the Laboratory Solutions and electronic materials segments, and the impact of the clinical services divestiture. The overall sentiment is balanced, reflecting both optimism for future growth and caution due to existing challenges.Highlights
Strong Bioprocessing Growth
Bioprocessing delivered high single-digit organic growth in Q4, marking the fourth consecutive quarter of outperformance. The segment showed strong order intake and is expected to grow mid-to-high single digits in 2025.
Record Free Cash Flow
Avantor generated $222 million in free cash flow in Q4 and $768 million for the year, achieving more than 110% free cash flow conversion for the full year.
Successful Debt Reduction
Avantor reduced its net leverage to 3.2 times by paying down $1.3 billion of debt in 2024, down from nearly 4 times at the start of the year.
Innovation and New Product Launches
Avantor launched new services and products, including a virtual assistant for laboratory researchers and Masterflex Miniflex Panel-Mount pumps, contributing to an expanded portfolio.
Adjusted EBITDA Margin Expansion
The adjusted EBITDA margin expanded to 18.2% in Q4, the highest level in more than a year, driven by improved mix and cost transformation initiatives.
Lowlights
Organic Revenue Decline
Reported revenue for the full year 2024 was $6.78 billion, representing a 2% organic revenue decline versus the prior year.
Laboratory Solutions Segment Weakness
Laboratory Solutions revenue declined 1% versus the prior year on an organic basis in Q4, with a muted seasonal increase in activity levels.
Impact of Clinical Services Divestiture
The divestiture of the clinical services business in October had a 2% headwind on full-year revenue and a 40 basis point margin impact.
Electronic Materials Segment Challenges
Electronic materials remained stable sequentially but experienced an expected year-over-year decline, impacting overall segment performance.
Company Guidance
During Avantor's Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, highlighting several key metrics. They anticipate organic revenue growth of 1% to 3%, despite a 2% headwind from the divestiture of their clinical services business and another 2% from FX impacts. For profitability, they project adjusted EBITDA margins of approximately 18% to 19%, driven by pricing, favorable mix, and the ongoing execution of their cost transformation initiative. Adjusted earnings per share (EPS) are expected to grow 10% year-over-year, ranging from $1.02 to $1.10. Free cash flow performance is forecasted between $650 million to $700 million, maintaining a strong conversion rate of approximately 95% of adjusted net income. Avantor also plans to continue reducing their net leverage, aiming to achieve a capital structure sustainably below 3 times, while projecting interest expenses between $180 million to $190 million.Avantor Corporate Events
Executive/Board Changes
Avantor Announces EVP Jim Bramwell’s Upcoming Retirement
Neutral
Jan 8, 2025
Avantor, Inc. announced the upcoming retirement of Jim Bramwell, its Executive Vice President of Sales and Customer Excellence, who will leave the company on or around June 30, 2025. Mr. Bramwell’s departure marks the end of over 30 years of distinguished service, indicating a significant change in the company’s leadership team and potential shifts in sales and customer strategies.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.