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Avantor Inc (AVTR)
NYSE:AVTR
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Avantor
(NYSE:AVTR)
66Neutral
Positive Factors
Executive Leadership
The CEO transition plan is underway, with the potential for internal promotion, which may bring stability and continuity to the company's strategic direction.
Market Position
AVTR remains the cheapest stock in the group, suggesting potential value for investors seeking lower-priced options.
Valuation
Despite concerns, the realistic downside risk to AVTR numbers is relatively minor, and with a -20% move lower, valuation remains compelling.
Negative Factors
Competitive Pressures
Management acknowledged lab share loss in a more meaningful way, which indicates competitive pressures.
Growth Prospects
Core growth guidance was lowered by 200 basis points, with margins also reduced, indicating challenges ahead for the company's growth prospects.
Trade and Tariff Risks
The guidance update does not include the impact of China tariffs, despite potential demand erosion.
Avantor (AVTR) vs. S&P 500 (SPY)
Market Cap
$8.16B
Dividend YieldN/A
Average Volume (3M)12.47M
Price to Earnings (P/E)11.4
Beta (1Y)0.50
Revenue Growth-2.64%
EPS Growth173.69%
CountryUS
Employees13,500
SectorBasic Materials
Sector Strength62
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.23
Shares Outstanding681,429,700
10 Day Avg. Volume17,104,317
30 Day Avg. Volume12,472,032
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.82
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.52
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.23Price Target Upside43.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
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's financial performance is solid, with commendable profitability and efficient cash management. The company maintains strong margins and low leverage, although revenue contraction and asset utilization need attention.Income Statement
Avantor's income statement shows a stable performance in profitability. The TTM Gross Profit Margin is at 33.48%, and the Net Profit Margin is 14.02%, reflecting strong cost management. However, revenue has decreased from $7.51 billion in 2022 to $6.78 billion in 2024, indicating a negative growth rate. The EBIT and EBITDA margins are healthy at 21.47% and 27.58%, respectively, suggesting operational efficiency.75
Positive
Balance Sheet
The balance sheet highlights a moderate financial position with a Debt-to-Equity Ratio of 0.14, indicating low leverage. Return on Equity stands at 11.73%, which is satisfactory. The Equity Ratio is 49.47%, showing a balanced capital structure. However, a decrease in total assets from $13.86 billion in 2021 to $12.12 billion in 2024 raises some concerns about asset management.70
Positive
Cash Flow
Avantor exhibits a robust cash flow profile. The Operating Cash Flow to Net Income Ratio is 1.18, and Free Cash Flow to Net Income Ratio is 0.97, both indicating strong cash generation capabilities compared to net earnings. The Free Cash Flow Growth Rate has been steady, supporting the company's liquidity and financial flexibility.80
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 |
| 4.06B | 5.54B | 6.29B | 7.02B | 4.89B | Net Debt |
| 3.79B | 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
11.98
Price Trends
15.48
Negative
18.24
Negative
21.18
Negative
Market Momentum
-0.98
Positive
28.36
Positive
9.44
Positive
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 11.98 is below the 20-day moving average (MA) of 14.21, below the 50-day MA of 15.48, and below the 200-day MA of 21.18, indicating a bearish trend. The MACD of -0.98 indicates Positive momentum. The RSI at 28.36 is Positive, neither overbought nor oversold. The STOCH value of 9.44 is Positive, 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $13.97B | 22.02 | 25.53% | 1.81% | -0.61% | 15.06% | |
69 Neutral | $3.13B | 18.56 | 4.32% | 3.10% | 3.58% | -5.17% | |
68 Neutral | $9.00B | 9.92 | 16.16% | 4.30% | 2.78% | 1.50% | |
66 Neutral | $8.16B | 11.43 | 12.52% | ― | -2.64% | 173.69% | |
61 Neutral | $10.11B | 26.30 | 3.71% | 2.65% | -1.27% | 48.34% | |
49 Neutral | $9.56B | ― | -7.56% | 4.03% | -39.35% | -120.09% | |
49 Neutral | $1.96B | -1.23 | -21.20% | 3.72% | 0.88% | -29.24% |
* Basic Materials Sector Average
Performance Comparison
AVTR
Avantor
11.98
-12.87
-51.79%
EMN
Eastman Chemical
76.09
-21.20
-21.79%
AVNT
Avient
35.47
-9.76
-21.58%
RPM
RPM International
108.78
-1.65
-1.49%
SQM
Sociedad Quimica Y Minera SA
33.85
-14.02
-29.29%
WLK
Westlake Chemical
78.83
-75.20
-48.82%
Avantor Earnings Call Summary
Earnings Call Date:Apr 25, 2025
(Q1-2025)
| % Change Since: -22.71%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a challenging quarter with a significant focus on addressing underperformance and external headwinds. While there were positive developments in cost savings and product expansion, the overall sentiment was affected by revenue declines, CEO transition, and market pressures.Q1-2025 Updates
Positive Updates
Cost Transformation Initiative Expansion
Avantor announced the expansion of its cost transformation initiative, aiming to achieve $400 million in run rate savings by the end of 2027, up from the previous target of $300 million by 2026.
Order Book Strength in Bioprocessing
Avantor reported strong order intake in its Bioprocessing segment, with continued momentum and recovery, indicating robust end market fundamentals.
New Product and Distribution Agreements
The company signed new agreements with Abcam and Fuji Film Bovine Scientific to expand its product portfolio, adding thousands of SKUs to its Lab Solutions and Bioscience Production segments.
Adjusted EBITDA Margin Improvement
Adjusted EBITDA margin increased by 20 basis points year-over-year to 17%, driven by the multiyear cost transformation initiatives.
Negative Updates
Organic Revenue Decline
Organic revenue declined 2% year-over-year, primarily due to underperformance in the Lab Solutions segment and funding uncertainty affecting U.S. higher education and bench stage biotech companies.
CEO Transition
Avantor announced a CEO transition, with Michael Stubblefield stepping down once a successor is found, amid a period of unsatisfactory financial performance.
Weakness in Lab Solutions
Lab Solutions segment revenue declined 3% organically, impacted by reduced funding in U.S. higher education and increased competitive intensity.
Controlled Environment Consumables Demand Decline
Demand for controlled environment consumables, used in clean rooms, declined due to customers placing tighter controls on usage.
Revised Revenue Guidance
Avantor revised its full-year organic revenue growth guidance to -1% to +1%, citing macroeconomic headwinds, including policy-related funding challenges and competitive pressures.
Company Guidance
In the first quarter of fiscal year 2025, Avantor experienced a 2% year-over-year decline in organic revenue, driven primarily by a 3% decline in the Lab Solutions segment and flat performance in the Bioscience Production segment. Despite this, the company managed an adjusted EBITDA margin increase of 20 basis points to 17%, supported by its ongoing multiyear cost transformation initiative, which aims to achieve $400 million in run-rate gross savings by the end of 2027. Adjusted earnings per share (EPS) for the quarter were $0.23, aligning with expectations. Due to macroeconomic headwinds, including a 40% funding drop for bench-stage biotech companies and caution in the education and government markets, Avantor revised its full-year guidance to reflect organic revenue growth between -1% to 1%, with adjusted EBITDA margin projected at 17.5% to 18.5%. The company is focusing on enhancing growth, expanding margins, and reducing leverage through strategic initiatives such as supply chain optimization, digital platform enhancements, and strategic pricing adjustments.Avantor Corporate Events
Executive/Board Changes
Avantor Announces Leadership Transition with CEO Departure
Neutral
Apr 28, 2025
On April 24, 2025, Avantor, Inc. announced a leadership transition with Michael Stubblefield stepping down as Director, President, and CEO upon the appointment of his successor. Stubblefield will continue in his role until a successor is appointed or until February 28, 2026, and will serve as a non-executive advisor thereafter to ensure a smooth transition.
Spark’s Take on AVTR Stock
According to Spark, TipRanks’ AI Analyst, AVTR is a Neutral.
Avantor’s overall stock score reflects solid financial management and strategic growth efforts, despite facing revenue challenges and external headwinds. The technical analysis suggests caution due to bearish signals, while valuation remains reasonable. The earnings call highlighted both opportunities and risks, with a focus on cost transformation and strategic initiatives to boost future performance.
To see Spark’s full report on AVTR stock, click here.
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.