The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. One can also evaluate a company's profitability by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). The 3-year average EBITDA growth rate is 165.5%, which ranks better than 99% of the companies in the industry of Medical Devices & Instruments. The 3-year average annual revenue growth of Bio-Rad Laboratories is 5.5%, which ranks in the middle range of the companies in the industry of Medical Devices & Instruments. A faster growing company creates more value for shareholders, especially if the growth is profitable. GuruFocus research has found that growth is closely correlated with the long term stock performance of a company. Growth is probably the most important factor in the valuation of a company. This is the revenue and net income of Bio-Rad Laboratories over the past years: Overall, GuruFocus ranks Bio-Rad Laboratories's profitability as fair. Its operating margin of 16.20% better than 76% of the companies in the industry of Medical Devices & Instruments. During the past 12 months, the company had revenues of $2.7 billion and earnings of $135.98 a share.
Bio-Rad Laboratories has been profitable 10 years over the past 10 years. Typically, a company with high profit margins offers better performance potential than a company with low profit margins. Investing in profitable companies carries less risk, especially in companies that have demonstrated consistent profitability over the long term. This is the debt and cash of Bio-Rad Laboratories over the past years: Based on this, GuruFocus ranks Bio-Rad Laboratories's financial strength as 8 out of 10, suggesting strong balance sheet. Bio-Rad Laboratories has a cash-to-debt ratio of 4.63, which ranks in the middle range of the companies in the industry of Medical Devices & Instruments. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. Since investing in companies with low financial strength could result in permanent capital loss, investors must carefully review a company's financial strength before deciding whether to buy shares. Link: These companies may deliever higher future returns at reduced risk. GF Value for Bio-Rad Laboratories is shown in the chart below.īecause Bio-Rad Laboratories is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth, which averaged 5.5% over the past three years and is estimated to grow 5.09% annually over the next three to five years. At its current price of $608.01 per share and the market cap of $18.2 billion, Bio-Rad Laboratories stock is believed to be significantly overvalued. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. The stock of Bio-Rad Laboratories ( NYSE:BIO, 30-year Financials) is believed to be significantly overvalued, according to GuruFocus Value calculation.
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