TMO
THERMO FISHER SCIENTIFIC INC.NYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Sep 5, 2026
What drives TMO's base case?
base-case thesisSales growth improved through 2025 and accelerated further in the first half of 2026. The base case assumes stronger customer activity, Clario and biopharma demand support growth before it gradually settles toward the company's long-run objective. Productivity and acquisition synergies lift profitability modestly, while continued investment preserves the product and service platform.
What shapes the assumptions
Improving quarterly demand
Year-over-year revenue growth increased from 0.0018 in Q1 2025 to 0.1049 in Q2 2026
Raises revenue growth
Large biopharma-services mix
Laboratory Products and Biopharma Services generated $6.693 billion, or about 0.558 of Q2 2026 segment revenue before eliminations
Raises revenue growth
Recent profit improvement
Q2 2026 GAAP profitability was approximately 0.174 versus 0.169 one year earlier
Raises operating margin
Expanded capital program
2026 net property and equipment spending guidance of $1.9 billion to $2.1 billion
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 29.4% a year. Over the last 5 years it grew 3.9% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 42.8% operating margin, against the 18.0% assumed here.
- How confident is this estimate?
- Robustness 59.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Quarterly organic revenue growth
This measures sales growth excluding acquisitions, divestitures and currency, making it the clearest indicator of underlying customer demand and share gains.
5.0%
reported2. Quarterly GAAP operating margin
This tracks the portion of revenue remaining after reported operating costs, including acquisition amortization and restructuring charges that ultimately affect shareholder cash flows.
17.4%
derived3. Quarterly Laboratory Products and Biopharma Services revenue
This measures revenue from Thermo Fisher's largest segment, including laboratory distribution, pharma services and clinical research, which now includes Clario.
$6.7B
reported4. Annual capital spending as a share of revenue
This measures recurring physical investment intensity and helps determine how much cash must be reinvested to sustain capacity and growth.
3.4%
derivedBase inputs from financials
source period →Base revenue (TTM)
$46.3B
Diluted shares
371,000,000
Net cash
-$11.8B
Bear
low confidence$154.78
IV / share
-75.0% vs $618.43
- Explicit cash flows
- $49.82
- Terminal value
- $136.63
- Net cash
- -$31.67
- Intrinsic value / share
- $154.78
88.3% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth6.0% → 4.5% → 3.5% → 3.0% → 2.5%medium
How derived: Q2 2026 reported growth was 0.10 and organic growth was 0.05, but this path assumes acquisition benefits fade, the $645 million microbiology divestiture reduces reported growth, and demand settles below management's long-term 0.07 organic objective.
Why this confidence: Two reported 2026 quarters establish the current direction ↑, Acquisition and divestiture timing obscures underlying growth ↓, Five-year demand normalization is inherently uncertain ↓
Measured by
- Quarterly organic revenue growth5.0%reported
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
- Annual capital spending as a share of revenue3.4%derived
Evidence for
- Full-year revenue grew only 0.04 in 2025 after being nearly unchanged in 2024, showing that recent quarterly acceleration may not persist.[2025 Form 10-K]· primary
- The disposed microbiology operation generated $645 million of 2025 revenue and therefore creates a near-term revenue headwind.[Microbiology divestiture]· primary
Evidence against
- Q2 2026 organic revenue grew 0.05 and management said customer activity across end markets continued to strengthen.[Q2 2026 results]· primary
Operating margin17.0%medium
How derived: Q2 2026 GAAP operating margin was 0.174, and the bear case holds it near 0.17 because unfavorable mix, integration spending, restructuring and acquisition-related amortization offset productivity gains.
Why this confidence: Current and full-year GAAP margins are closely aligned ↑, Future acquisition amortization and restructuring are uncertain ↓
Measured by
- Quarterly GAAP operating margin17.4%derived
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
Evidence for
- GAAP operating margin was 0.174 in 2025 and 0.174 in Q2 2026, providing direct support for a 0.17 normalized outcome.[Q2 2026 results]· primary
Evidence against
- Q2 2026 adjusted operating margin increased from 0.219 to 0.228, while Analytical Instruments and the other reporting segments recorded year-over-year segment-margin improvement.[Q2 2026 results]· primary
Tax rate15.0%low
How derived: Management expects a 2026 adjusted tax rate near 0.115, but the bear case raises the normalized rate to 0.15 to reflect reduced foreign-tax benefits and the spread of the OECD minimum-tax framework.
Why this confidence: Management supplied explicit near-term tax guidance ↑, Country profit mix and tax-credit availability can change materially ↓, Global minimum-tax implementation remains evolving ↓
No tracked driver measures this assumption yet.
Evidence for
- Numerous jurisdictions have enacted or are considering the OECD Pillar Two minimum-tax rules, whose stated minimum rate is 0.15.[2025 Form 10-K]· primary
Evidence against
- Management expects a 2026 GAAP tax rate of 0.07 to 0.09 and an adjusted rate near 0.115, and currently does not expect Pillar Two to have a material impact.[2025 Form 10-K]· primary
Reinvestment rate38.0%low
How derived: The rate assumes 0.38 of after-tax operating profit is retained because 2026 capital spending is guided to $1.9 billion to $2.1 billion, working-capital needs are rising, and acquisition-led growth has required substantial additional capital.
Why this confidence: Management provided a current capital-spending range ↑, Acquisition spending is irregular and difficult to normalize ↓, Working-capital reversals create large annual variation ↓
Measured by
Evidence for
- First-half 2026 property and equipment purchases increased to $826 million, and management raised full-year net capital-spending expectations to $1.9 billion to $2.1 billion.[Q2 2026 Form 10-Q]· primary
- Thermo Fisher paid $8.875 billion plus potential additional payments for Clario, illustrating the capital intensity of acquisition-led expansion.[Clario acquisition completion]· primary
Evidence against
- Thermo Fisher generated $6.337 billion of free cash flow in 2025 despite its capacity and capability investments.[2025 Form 10-K]· primary
Terminal growth2.0%low
How derived: The 0.02 perpetual rate is well below management's 0.07 long-term organic objective and the 0.0477 ten-year Treasury yield, reflecting mature-market competition and a conservative fade from recent recovery.
Why this confidence: Perpetual growth is constrained below the long-term risk-free rate ↑, The assumption extends beyond observable management guidance ↓
Measured by
- Quarterly organic revenue growth5.0%reported
Evidence for
- Revenue declined in 2023, was nearly unchanged in 2024 and grew 0.04 in 2025, demonstrating that mature-period growth can fall well below management's strategic objective.[2025 Form 10-K]· primary
Evidence against
- Management identifies enduring growth trends in a $255 billion addressable market and targets long-term organic growth of 0.07.[2026 Investor Day]· primary
Base
low confidence$241.92
IV / share
-60.9% vs $618.43
- Explicit cash flows
- $65.41
- Terminal value
- $208.18
- Net cash
- -$31.67
- Intrinsic value / share
- $241.92
86.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth9.0% → 7.5% → 7.0% → 6.5% → 6.0%medium
How derived: The path begins below Q2 2026 reported growth of 0.10, incorporates Clario and strengthening end markets, and then fades toward but slightly below management's long-term 0.07 organic objective.
Why this confidence: Current growth, segment results and a long-term management objective are available ↑, Q1-to-Q2 organic growth changed materially ↓, Future reported growth depends partly on acquisition activity ↓
Measured by
- Quarterly organic revenue growth5.0%reported
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
- Annual capital spending as a share of revenue3.4%derived
Price implies: 29.4% vs our 7.2% — one of several sets that fit this price
Evidence for
- Q2 2026 revenue grew 0.10, organic revenue grew 0.05 and management reported strengthening customer activity across end markets.[Q2 2026 results]· primary
- Management targets long-term organic revenue growth of 0.07 and describes demand trends in its $255 billion market as improving.[2026 Investor Day]· primary
Evidence against
- Q1 2026 organic growth was only 0.01, and 2025 full-year growth was 0.04 after nearly flat 2024 revenue.[Q1 2026 results]· primary
Operating margin18.0%medium
How derived: Starting from the 0.174 Q2 2026 GAAP margin, the base case reaches 0.18 as PPI productivity and Clario synergies modestly outweigh integration costs and mix pressure.
Why this confidence: Recent GAAP margin improvement is directly reported ↑, Clario synergy amount and timing are management estimates ↓, Future business mix is uncertain ↓
Measured by
- Quarterly GAAP operating margin17.4%derived
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
Price implies: 42.8% vs our 18.0% — one of several sets that fit this price
Evidence for
- Q2 2026 GAAP operating income grew 0.14 against revenue growth of 0.10, lifting GAAP margin from 0.169 to 0.174.[Q2 2026 results]· primary
- Thermo Fisher expects approximately $175 million of annual adjusted operating-income synergies from Clario by year five.[Clario acquisition completion]· primary
Evidence against
- Acquisition-related amortization reduced Q2 2026 GAAP margin by 0.04, while restructuring and other excluded items reduced it further.[Q2 2026 results]· primary
Tax rate12.0%medium
How derived: The 0.12 normalized rate rounds management's 2026 adjusted-tax expectation of approximately 0.115 upward to allow for less favorable geographic profit mix over five years.
Why this confidence: The value closely follows explicit adjusted-tax guidance ↑, Geographic profit mix and credits remain volatile ↓
No tracked driver measures this assumption yet.
Evidence for
- Management expects an adjusted tax rate of approximately 0.115 in 2026.[2025 Form 10-K]· primary
Evidence against
- Management's 2026 GAAP tax-rate range is only 0.07 to 0.09 because of expected geographic profitability and foreign tax credits.[2025 Form 10-K]· primary
- The company warns that country mix, audits, tax credits and changing laws can cause significant period-to-period variation.[2025 Form 10-K]· primary
Reinvestment rate32.0%low
How derived: The model retains 0.32 of after-tax operating profit, balancing annual capital spending around 0.03 to 0.04 of revenue with working-capital investment and continuing, but normalized, acquisition activity.
Why this confidence: Three years of comparable capital-spending data are available ↑, The DCF rate also normalizes working capital and acquisitions ↓, Large acquisitions make annual reinvestment unusually volatile ↓
Measured by
Evidence for
- Property and equipment purchases were $1.479 billion, $1.400 billion and $1.525 billion in 2023, 2024 and 2025, respectively, remaining near 0.03 to 0.04 of revenue.[2025 Form 10-K]· primary
- Management expects 2026 net capital spending of $1.9 billion to $2.1 billion to support capacity and capabilities.[Q2 2026 Form 10-Q]· primary
Evidence against
- First-half 2026 free cash flow rose to $2.503 billion from $1.479 billion even as property and equipment purchases increased.[Q2 2026 Form 10-Q]· primary
Terminal growth2.5%low
How derived: The 0.025 perpetual rate assumes Thermo Fisher retains a durable position in science spending but fades well below its 0.07 organic objective and remains below the 0.0477 long-term Treasury yield.
Why this confidence: The company serves diversified markets with enduring scientific demand ↑, Perpetual assumptions cannot be validated over an observable period ↓
Measured by
- Quarterly organic revenue growth5.0%reported
Evidence for
- Thermo Fisher serves a disclosed $255 billion market supported by long-duration demand for research, diagnostics and drug development.[2026 Investor Day]· primary
Evidence against
- Revenue declined in 2023 and was nearly unchanged in 2024 before recovering in 2025.[2025 Form 10-K]· primary
Bull
low confidence$347.67
IV / share
-43.8% vs $618.43
- Explicit cash flows
- $83.34
- Terminal value
- $296.00
- Net cash
- -$31.67
- Intrinsic value / share
- $347.67
85.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth11.0% → 9.5% → 8.5% → 7.5% → 7.0%low
How derived: The path extends Q2 2026 reported growth of 0.10 as Clario, bioproduction, clinical research and new analytical products produce sustained share gains before growth converges to management's 0.07 long-term organic objective.
Why this confidence: Q2 segment and organic data identify concrete sources of acceleration ↑, The forecast exceeds management's long-term objective during most explicit years ↓, Only one quarter currently demonstrates high organic growth ↓
Measured by
- Quarterly organic revenue growth5.0%reported
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
- Annual capital spending as a share of revenue3.4%derived
Evidence for
- Q2 2026 reported revenue grew 0.10, organic revenue grew 0.05 and management described continued share gains and strengthening end markets.[Q2 2026 results]· primary
- Laboratory Products and Biopharma Services revenue grew 0.12 in Q2 2026, including 0.05 organic growth, while clinical research, research and safety, and pharma services all contributed.[Q2 2026 Form 10-Q]· primary
Evidence against
- Q1 2026 organic revenue grew only 0.01, indicating that the Q2 acceleration is not yet a long record.[Q1 2026 results]· primary
- The microbiology divestiture removes a business that generated $645 million of 2025 revenue.[Microbiology divestiture]· primary
Operating margin20.0%low
How derived: The bull case expands the 0.174 Q2 2026 GAAP margin to 0.20 as stronger volume, PPI productivity, improved Analytical Instruments performance and Clario synergies narrow part of the gap to the current 0.228 adjusted margin.
Why this confidence: Every reporting segment produced a positive Q2 2026 segment margin ↑, Achieving 0.20 requires sustained productivity and synergy realization ↓, Acquisition amortization may remain structurally significant ↓
Measured by
- Quarterly GAAP operating margin17.4%derived
- Quarterly Laboratory Products and Biopharma Services revenue$6.7Breported
Evidence for
- Q2 2026 adjusted margin reached 0.228, while Analytical Instruments segment margin increased from 0.188 to 0.230 and consolidated GAAP margin improved by 0.005.[Q2 2026 results]· primary
- Management expects approximately $175 million of annual adjusted operating-income synergies from Clario by year five.[Clario acquisition completion]· primary
Evidence against
- GAAP operating margin was only 0.174 in both full-year 2025 and Q2 2026, leaving a substantial gap to the bull assumption.[2025 Form 10-K]· primary
Tax rate9.0%low
How derived: The bull case uses the high end of management's 2026 GAAP range of 0.07 to 0.09, assuming the current geographic profit mix and foreign-tax-credit generation remain durable.
Why this confidence: The value is explicitly within current GAAP guidance ↑, Maintaining an unusually low tax rate for five years is uncertain ↓, Adjusted tax guidance is materially higher ↓
No tracked driver measures this assumption yet.
Evidence for
- Management expects its 2026 GAAP effective tax rate to remain between 0.07 and 0.09.[2025 Form 10-K]· primary
Evidence against
- Management expects the adjusted tax rate to be approximately 0.115, above the bull assumption.[2025 Form 10-K]· primary
- The company identifies changing tax laws, audits, jurisdictional earnings mix and the OECD minimum-tax framework as sources of upward tax-rate risk.[2025 Form 10-K]· primary
Reinvestment rate28.0%low
How derived: The case retains 0.28 of after-tax operating profit because faster growth is assumed to come from high returns on existing commercial capabilities, PPI productivity and Clario revenue synergies rather than proportionately higher physical investment.
Why this confidence: Recent cash generation supports high capital efficiency ↑, The assumed combination of high growth and lower reinvestment requires superior returns on capital ↓, Acquisition requirements are unpredictable ↓
Measured by
Evidence for
- First-half 2026 free cash flow increased to $2.503 billion from $1.479 billion, indicating improved cash conversion despite higher capital spending.[Q2 2026 Form 10-Q]· primary
- Clario's anticipated $175 million of year-five operating synergies are expected primarily from revenue synergies rather than additional physical capacity.[Clario acquisition completion]· primary
Evidence against
- First-half property and equipment purchases rose 0.259 year over year, and full-year net capital spending is expected to reach $1.9 billion to $2.1 billion.[Q2 2026 Form 10-Q]· primary
- The Clario transaction required $8.875 billion in cash plus possible additional payments, demonstrating that external growth can consume substantial capital.[Clario acquisition completion]· primary
Terminal growth3.0%low
How derived: The 0.03 perpetual rate assumes Thermo Fisher sustains modest real growth from scientific innovation and healthcare demand while remaining below both its 0.07 strategic organic objective and the 0.0477 ten-year Treasury yield.
Why this confidence: Diversified scientific and healthcare demand supports durability ↑, The assumption covers an indefinite horizon ↓, Past revenue contractions demonstrate cyclicality ↓
Measured by
- Quarterly organic revenue growth5.0%reported
Evidence for
- Management describes enduring long-term trends in a $255 billion market and targets long-term organic growth of 0.07 through innovation and share gains.[2026 Investor Day]· primary
Evidence against
- The company's revenue contracted in 2023 and was nearly flat in 2024, showing that even essential scientific markets experience cyclical interruptions.[2025 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating59 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 86% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 0.2% | 4.93 | -8.1% | 384M | -1.0% |
| Q1 2025 | 0.2% | 0.95 | -59.5% | 379M | -1.3% |
| Q2 2025 | 3.0% | 2.92 | -32.5% | 378M | -1.3% |
| Q3 2025 | 4.9% | 4.85 | -1.6% | 378M | -1.6% |
| Q1 2026 | 6.2% | 2.19 | 129.7% | 373M | -1.6% |
| Q2 2026 | 10.5% | 4.51 | 54.4% | 371M | -1.9% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available U.S. Treasury yield curve before the valuation date reports a 0.0477 ten-year constant-maturity yield.
A 0.88 unlevered U.S. healthcare-products beta is relevered using TMO's approximately 0.187 debt-to-equity ratio and a 0.12 normalized tax rate, producing a bottom-up beta of approximately 1.03.
The input uses Aswath Damodaran's September 2026 trailing-twelve-month adjusted-payout implied U.S. equity risk premium of 0.0414.
TMO closed at $613.78 on 2026-09-04, the latest completed trading session before the valuation date.
Generated 9/5/2026, 11:41:00 PM · pipeline v1.2.0