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Is It Too Late To Consider Buying Thermo Fisher Scientific Inc. (NYSE:TMO)?

Let's talk about the popular Thermo Fisher Scientific Inc. (NYSE:TMO). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an 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 the opportunity still exists.

Check out our latest analysis for Thermo Fisher Scientific

What Is Thermo Fisher Scientific Worth?

Thermo Fisher Scientific appears to be overvalued by 24% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$540 on the market compared to my intrinsic value of $434.53. This means that the buying opportunity has probably disappeared for now. 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.

Can we expect growth from Thermo Fisher Scientific?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 28% 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? It seems like the market has well and truly priced in TMO’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to 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.

Are you a potential investor? If you’ve been keeping an eye on TMO for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for TMO, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Thermo Fisher Scientific as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Thermo Fisher Scientific you should know about.

If you are no longer interested in Thermo Fisher Scientific, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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