Agilent Technologies Inc (A, Financial) has shown a stable performance with a 3-month gain of 7.1% and an Earnings Per Share (EPS) of 4.21. With the stock's price currently at $137.01 and a day's change of 0%, investors are keen on understanding whether Agilent Technologies (A) is fairly valued. We invite you to delve into our valuation analysis to determine the stock's true market value.
Company Introduction
Agilent Technologies Inc (A, Financial), originally part of Hewlett-Packard, has transformed into a leading entity in life sciences and diagnostics. The company's measurement technologies cater to a wide array of customers, including those in biopharmaceutical, chemical, and advanced materials industries. With a significant presence in the U.S. and China, Agilent Technologies supports a range of sectors from clinical labs to government organizations. The company's current market capitalization stands at $40.10 billion, with sales amounting to $6.80 billion. Comparing the current stock price to the GF Value of $149.33, we set the stage for a detailed exploration of the company's intrinsic value.
Summarizing the GF Value
The GF Value is a unique metric that calculates the intrinsic value of a stock. It incorporates historical trading multiples, a GuruFocus adjustment factor for past returns and growth, and projections of future business performance. When a stock trades significantly above the GF Value Line, it may be overvalued, potentially leading to poorer future returns. Conversely, a stock trading below this line could be undervalued, indicating a likelihood of better future returns. With Agilent Technologies (A, Financial) trading at $137.01, our analysis suggests that the stock is fairly valued.
Because Agilent Technologies is fairly valued, we anticipate that the long-term return of its stock will closely align with the company's business growth rate.
Link: Discover companies that may deliver higher future returns at reduced risk.
Financial Strength
Evaluating the financial strength of a company is crucial prior to investing. Agilent Technologies boasts a cash-to-debt ratio of 0.58, which, despite being below the industry median, supports a financial strength rating of 8 out of 10. This strong financial position indicates a lower risk of permanent loss for investors.
Profitability and Growth
Agilent Technologies has maintained profitability for the past decade, showcasing strong profitability with an operating margin surpassing 88% of its peers. This is a testament to the company's robust performance potential. Furthermore, Agilent Technologies has demonstrated a commendable growth trajectory, with revenue and EBITDA growth rates outperforming more than half of its industry counterparts.
ROIC vs. WACC
A critical profitability measure is the comparison between Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC). Agilent Technologies has achieved an impressive ROIC of 14.5%, which exceeds its WACC of 11.21%, indicating value creation for shareholders.
Conclusion
In conclusion, Agilent Technologies (A, Financial) appears to be fairly valued, supported by a strong financial condition and robust profitability. Its growth outpaces a significant portion of the Medical Diagnostics & Research industry. For a more in-depth look at Agilent Technologies' financials, click here to view the company's 30-Year Financials.
For insights into high-quality companies that may deliver above-average returns, please visit the GuruFocus High Quality Low Capex Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
