AGILENT TECHNOLOGIES, INC. (A): what the price requires
At today's price, AGILENT TECHNOLOGIES, INC. (A) is priced for today's economics sustained for ~11.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/A
Headline
| Field | Value |
|---|---|
| Ticker | A |
| Company | AGILENT TECHNOLOGIES, INC. |
| Current price | $133.48/sh |
| Composition | Americas 40% / Europe 28% / Asia Pacific 32% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | segment |
| Must persist for | 11.3y |
Solve inputs: computed at a 9.4% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.2 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| cohort percentile (of 177 peers) | 87 |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.47x | 5 | expensive |
| Earnings | 2.48x | 5 | expensive |
| Relative | 1.46x | 5 | expensive |
| Growth | 0.86x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $135.82 | 0.98x | yes | FCF base $1.2B, growth 9% (input: historical growth), terminal g 4.0%, WACC 8.5%, 6yr projection |
| DCF Exit Multiple | Growth | $188.49 | 0.71x | yes | Exit EV/EBITDA: 22.2x / 24.2x / 26.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $91.22 | 1.46x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 14.9x / 18.0x / 21.1x (bear / base = reference held flat / bull), EV/EBITDA 15.67x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $54.02 | 2.47x | yes | BV/sh $25.01, ROE (TTM) 20.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $78.57 | 1.70x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $156.06 | 0.86x | yes | Rev $7.2B, growth 9% (input: historical growth; tapered), Terminal P/S: 4.3x / 5.2x / 6.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $127.53 | 1.05x | yes | EPS $4.98, growth 26% (input: historical EPS growth), PEG=1.04 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $66.54 | 2.01x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.58B × (1−17%) / WACC 8.5% → EPV (no growth) |
| Residual Income | Asset | $76.02 | 1.76x | yes | BV $25.01 + 5yr PV of (ROE (TTM) 20.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $52.94 | 2.52x | yes | √(22.5 × EPS $4.98 × BVPS $25.01) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $63.31 | 2.11x | yes | EBITDA $1.62B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $36.05 | 3.70x | yes | FCF $1087.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $31.01 | 4.30x | yes | SBC-adj FCF $0.95B (FCF $1.09B − SBC $0.13B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $160.69 | 0.83x | yes | EPS $4.98 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $11.25 | 11.86x | yes | BV $25.01 × (ROIC 3.8% / WACC 8.5%) |
| P/Sales Sector | Relative | $63.89 | 2.09x | yes | Revenue $7.23B × sector P/S 2.5x |
| PEG Fair Value | Relative | $186.75 | 0.71x | yes | EPS $4.98 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $53.84 | 2.48x | yes | EPS $4.98 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.8b |
| Net debt / NOPAT (after-tax) | 1.56x |
| Net debt / operating income (pre-tax) | 1.30x |
| Interest coverage | 13.2x |
| Share count CAGR (buyback) | -1.5% |
| Burning cash | no |
Bullet Takeaways
- At $127, the price for Agilent's life sciences and diagnostics engine works backward to roughly eight years of operating growth held near the top of its sustainable range. Only the growth-DCF family of methods reaches the price; the asset, earnings-power, and peer-multiple frames all land lower, so the market is paying for durable compounding the static frames cannot see.
- The instruments-and-diagnostics business is genuinely high quality: trailing return on equity near 20%, interest coverage close to 15x, and net debt of about $1.8 billion against $1.6 billion of trailing operating income (roughly 1.2x). This is a balance sheet that can carry the bet, not one straining under it.
- The second-quarter fiscal 2026 print did the heavy lifting for the bulls: 10% reported revenue growth, non-GAAP operating margin of 26.4% (up 130 basis points year over year), and a raised full-year EPS guide to $6.00 to $6.10. The stock jumped on the day. The open question is whether that momentum is the start of a re-acceleration or a single strong quarter against an easy comparison.
Bull Case
Valuing an instruments-and-diagnostics company is its own discipline, and Agilent sits on the comfortable side of it. The business is not selling a single product cycle, it is selling razors and blades into laboratories: chromatographs and mass spectrometers as the durable platform, then a recurring stream of columns, reagents, supplies, software, and service contracts that follows for years. That recurring tail is why the peer-multiple and asset frames consistently understate the business. They price the steel on the bench, not the annuity attached to it. The FY2025 10-K describes the deliberate move of the chemistries-and-supplies, laboratory-automation, and software-and-informatics divisions into the Agilent CrossLab segment, a reorganization that concentrates exactly that recurring economics into one reporting line (FY2025 10-K, accession 0001090872-25-000087). When a company restructures to surface its consumables-and-service base, it is usually because that base is where the durable margin lives.
The returns confirm the quality. Trailing return on equity sits near 20% against a cost of equity around 9.3%, and the excess-return models land well below the price precisely because they assume that gap fades. The market is making the opposite assumption, and the second-quarter fiscal 2026 result gave it reason to. Revenue grew 10% reported, non-GAAP operating margin expanded 130 basis points year over year to 26.4%, and management raised the full-year EPS guide to $6.00 to $6.10, a 7% to 9% increase. The stock rose sharply on the release. A margin step-up of that size in a single quarter is not a mix accident, it is operating leverage on a recovering instrument-replacement cycle.
The balance sheet means the durability bet is underwritten, not borrowed. Net debt of roughly $1.8 billion against $1.6 billion of trailing operating income is barely over one turn, interest coverage is close to 15x, and the share count is shrinking about 1.5% a year. None of the standard distress levers are pulled. So the bull case is clean to state: a high-return, recurring-revenue franchise, a balance sheet that can fund the compounding, and a just-delivered quarter that points to the instrument cycle turning back up. The price asks for eight years of that holding. For a business with this return profile and this consumables tail, that is a demanding bet but not an absurd one.
Bear Case
Start with where the valuation methods actually disagree, because the disagreement is the whole bear case. Of the applicable models, only the growth-DCF and exit-multiple frames clear the $127 price (June 27, 2026). The Simple Excess Return model lands at about $54, the two-stage version at about $79, and the relative-valuation method at about $90. Three of the four families say richly valued, and only the family that explicitly extrapolates growth reaches the price. The conservative methods are not being pessimistic for sport. They are pricing what the business has actually earned rather than what it is assumed to keep earning, and when the static frames cluster that far below the quote, the burden of proof sits entirely on the growth assumption.
That growth assumption is the fragile part. The inverted price embeds operating growth held near the top of its sustainable range for roughly eight years, and on the historical comparison only about a quarter of comparable fast-growers actually sustained that pace for that long. Agilent's own filing names the dependency directly: demand turns on the capital-spending and research-and-development budgets of its customers, and the 10-K warns that fluctuations in those research and development budgets could have a significant effect on demand for its products (FY2025 10-K, accession 0001090872-25-000087). Pharma capital plans, academic and government research funding, and industrial lab spending are all cyclical, and the strong second quarter came against a depressed comparison. One good quarter inside a cycle is not the same as eight years of ceiling-rate compounding.
The competitive frame adds the second leg. Agilent competes against Thermo Fisher, Danaher, and a field of instrument and diagnostics specialists, and its own risk disclosure lists the pressures bluntly: it must differentiate its offerings from competitors, price its products competitively, and anticipate competitors' development of new products and technological innovations (FY2025 10-K, accession 0001090872-25-000087). In an instruments market where the next-generation platform can reset share, ceiling-rate growth for eight straight years assumes the company stays ahead of every one of those threats for the entire stretch. The bear case is not that Agilent is a bad business. It is that the price already credits the best version of a cyclical, competitive franchise, leaving little room if the cycle is ordinary or a rival lands the better instrument.
Valuation
Read the price as a question rather than a verdict. At $127, the dominant premium attaches to the life sciences and diagnostics business, and inverting the price turns it into a single assumption: operating growth held near the top of its sustainable range for about eight years, solved at a cost of capital near 9.5%, where each additional percentage point of growth would shorten the implied horizon by close to two years. That is the bet a buyer underwrites today. Against history, only about a quarter of comparable fast-growers sustained that pace for that long, which is why the read comes out elevated rather than comfortably supported. Treat the eight-year figure as approximate, a single solve under fixed fade and discount assumptions, not a measured fact.
The valuation X-ray shows why the price needs that assumption. Grouped by family, the asset-value models sit far below the price (Simple Excess Return near $54, two-stage near $79), the peer-multiple frame lands around $90, and only the forward-growth family reaches up: the perpetual-growth DCF at about $137 and the exit-multiple DCF higher still, both built on free cash flow near $1.2 billion and revenue growth around 9%. When asset, earnings, and relative methods all cluster below the quote and only growth-DCF clears it, the market is paying for durable compounding the static frames structurally cannot price.
What backs the bet is the balance sheet. Net debt of about $1.8 billion is roughly 1.2 times trailing operating income, interest coverage is near 15x, and the company is buying back stock at about 1.5% a year. Nothing here forces the issue. The valuation conclusion is therefore not cheap or expensive in the abstract, it is conditional: the price is reasonable only if the recurring, high-return franchise compounds at close to ceiling rate for most of a decade. The second-quarter fiscal 2026 beat and raised guide are the first installment of evidence for that path. The next several quarters either extend it or expose the gap the conservative models are flagging.
Catalysts
The near-term tape is set by the second-quarter fiscal 2026 result reported in late May 2026. Agilent posted revenue of about $1.83 billion, up 10% reported and 6.3% core, with GAAP EPS of $1.20 and non-GAAP EPS of $1.49, and non-GAAP operating margin of 26.4% that expanded 130 basis points year over year. The stock rose sharply on the print. Management raised full-year fiscal 2026 guidance to revenue of $7.39 to $7.49 billion and non-GAAP EPS of $6.00 to $6.10, implying 7% to 9% EPS growth, and guided third-quarter revenue to $1.83 to $1.85 billion with non-GAAP EPS of $1.48 to $1.50.
The forward watch items are straightforward. The third-quarter fiscal 2026 report, due in the late-August window, is the first test of whether the margin step-up and core-growth re-acceleration hold or fade back toward the prior trend. Beyond the print, the swing factors are the ones the business has always turned on: pharma and biotech capital-equipment budgets, academic and government research funding, and the pace of the instrument-replacement cycle in China and the broader Asia Pacific region, which carries roughly a third of revenue. Continued margin expansion and a second consecutive quarter of core growth above the mid-single digits would support the durability the price is underwriting. A softer guide or a stall in core growth would hand the argument back to the conservative valuation models.
Sources: Agilent Q2 FY2026 press release and earnings materials (businesswire.com, 2026-05-27); Trefis Q2 earnings recap (trefis.com, 2026-05-29); Investing.com Q2 FY2026 earnings call transcript (investing.com).
Peer Cohorts (Per Segment, With Filing Citations)
Life Sciences and Diagnostics Markets (reported)
- TMO (THERMO FISHER SCIENTIFIC INC.)
- (no filing in the citation store)
- DHR (Danaher Corporation)
- (no filing in the citation store)
- MTD (Mettler-Toledo International Inc.)
- (no filing in the citation store)
- WAT (Waters Corporation)
- (no filing in the citation store)
- RVTY (REVVITY, INC)
- (no filing in the citation store)
Agilent CrossLab (reported)
- TMO (THERMO FISHER SCIENTIFIC INC.)
- (no filing in the citation store)
- DHR (Danaher Corporation)
- (no filing in the citation store)
- WAT (Waters Corporation)
- (no filing in the citation store)
- BRKR (BRUKER CORPORATION)
- (no filing in the citation store)
- MTD (Mettler-Toledo International Inc.)
- (no filing in the citation store)
Applied Markets (reported)
- TMO (THERMO FISHER SCIENTIFIC INC.)
- (no filing in the citation store)
- BRKR (BRUKER CORPORATION)
- (no filing in the citation store)
- MTD (Mettler-Toledo International Inc.)
- (no filing in the citation store)
- MKSI (MKS INC)
- (no filing in the citation store)
- WAT (Waters Corporation)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.