As of May 24, 2025, Thermo Fisher Scientific Inc's estimated intrinsic value ranges from $217.43 to $892.24 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $892.24 | +126.7% |
| Discounted Cash Flow (5Y) | $602.44 | +53.0% |
| Dividend Discount Model (Multi-Stage) | $520.56 | +32.2% |
| Dividend Discount Model (Stable) | $332.67 | -15.5% |
| Earnings Power Value | $217.43 | -44.8% |
Is Thermo Fisher Scientific Inc (TMO) undervalued or overvalued?
With the current market price at $393.66, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Thermo Fisher Scientific Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.81 | 0.9 |
| Cost of equity | 7.6% | 9.9% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 9.2% | 10.3% |
| Debt/Equity ratio | 0.21 | 0.21 |
| After-tax WACC | 7.1% | 9.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $602 | $257,470M | 82.6% |
| 10-Year Growth | $892 | $366,865M | 70.7% |
| 5-Year EBITDA | $649 | $275,057M | 83.7% |
| 10-Year EBITDA | $898 | $368,870M | 70.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $8,863M |
| Discount Rate (WACC) | 9.0% - 7.1% |
| Enterprise Value | $98,704M - $125,559M |
| Net Debt | $30,055M |
| Equity Value | $68,649M - $95,504M |
| Outstanding Shares | 377M |
| Fair Value | $182 - $253 |
| Selected Fair Value | $217.43 |
| Metric | Value |
|---|---|
| Market Capitalization | $148603M |
| Enterprise Value | $178658M |
| Trailing P/E | 22.82 |
| Forward P/E | 19.76 |
| Trailing EV/EBITDA | 17.20 |
| Current Dividend Yield | 40.17% |
| Dividend Growth Rate (5Y) | 14.69% |
| Debt-to-Equity Ratio | 0.21 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $267.67 |
| Discounted Cash Flow (5Y) | 25% | $150.61 |
| Dividend Discount Model (Multi-Stage) | 20% | $104.11 |
| Dividend Discount Model (Stable) | 15% | $49.90 |
| Earnings Power Value | 10% | $21.74 |
| Weighted Average | 100% | $594.04 |
Based on our comprehensive valuation analysis, Thermo Fisher Scientific Inc's weighted average intrinsic value is $594.04, which is approximately 50.9% above the current market price of $393.66.
Key investment considerations:
Given these factors, we believe Thermo Fisher Scientific Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.