Avantor, Inc. (AVTR): what the price assumes
In the published model solve dated 2026-Q2, anchored at $14.58, Avantor, Inc. (AVTR) is priced for +14.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/AVTR
Headline
| Field | Value |
|---|---|
| Ticker | AVTR |
| Company | Avantor, Inc. |
| Sector / Industry | Technology |
| Current price | $14.58/sh |
| Composition | Proprietary 53% / Third-party 47% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 2.9% |
| Operating margin (mid-cycle) | 10.0% |
| Margin compression (value-band) | -7.1pp |
| Trailing margin (depressed year) | -4.5% |
| Implied growth | 14.5% |
| Multiple paid | 21x mid-cycle operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.8% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: n/a
| Reference | Value |
|---|---|
| vs own history | +0.18σ |
Valuation X-Ray
Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.
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 | 1.98x | 3 | expensive |
| Earnings | 8.53x | 3 | expensive |
| Relative | — | 0 | — |
| Growth | 1.67x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.9%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $4.00 | 3.65x | yes | FCF base $0.4B, growth -2% (input: historical growth), terminal g 0.5%, WACC 6.9%, 5yr projection |
| DCF Exit Multiple | Growth | $12.79 | 1.14x | yes | Exit EV/EBITDA: 109.4x / 111.4x / 113.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/S fallback (negative EPS): Sector P/S 2.5x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $8.19 | 1.78x | yes | Reference only (book value floor): BV/sh $8.19, ROE negative |
| Two-Stage Excess Return | Asset | $7.37 | 1.98x | yes | Reference only (book value with convergence): BV/sh $8.19, ROE converges to ke |
| Discounted Future Market Cap | Growth | $8.72 | 1.67x | yes | Rev $6.6B, growth -2% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $12.25 | 1.19x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.06B × (1−22%) / WACC 6.9% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.12B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $1.71 | 8.53x | yes | FCF $438.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $1.04 | 14.02x | yes | SBC-adj FCF $0.40B (FCF $0.44B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | $1.00 | 14.58x | yes | BV $8.19 × (ROIC 0.8% / WACC 6.9%) |
| P/Sales Sector | Relative | — | — | no | Revenue $6.55B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Laboratory Solutions | operating | enterprise | $4.4b | — | withheld | unresolved no unit value |
| Bioscience Production | operating | enterprise | $2.2b | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $3.6b |
| Net debt / NOPAT (after-tax) | 6.97x |
| Net debt / operating income (pre-tax) | 5.44x |
| Share count CAGR (buyback) | -0.2% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 10.0%); the trailing year was depressed.
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Roughly 53% of Avantor's revenue is product it manufactures rather than resells, and the annual report describes that half as high-purity materials and customized solutions built to demanding customer specifications and stringent regulatory and industry requirements, which is the part a customer cannot swap out casually.
- The reported loss is largely an accounting event rather than an operating one: a goodwill writedown of 785.0 million dollars against the distribution unit in fiscal 2025, layered on top of amortization of roughly 301 million a year, sits over a business that still produced positive free cash flow.
- Second-quarter results arrive July 29, 2026, and the line to watch is organic sales, which fell 4.1% in the first quarter against a price that requires operating profit to compound.
Bull Case
The accounting year was ugly. The cash year was not, and that distinction carries most of the bull case. The fiscal 2025 books absorbed a goodwill impairment charge of $ 785.0 million related to our Distribution reporting unit, and the annual report is candid about the trigger: the charge followed sustained decreases in our publicly quoted share price and market capitalization alongside weaker results in that unit. The share price helped produce the loss. Using the loss to explain the share price runs the causation backwards.
Underneath the write-off the machinery still turns. Amortization expense was $ 301.1 million in 2025, a non-cash charge against acquisitions completed years ago, and trailing free cash flow came to roughly 439 million dollars. Interest is covered 3.7 times. The share count has moved about 0.2% a year over the four years to March 2026, which in a stretch this difficult means management financed itself without asking holders to fund it at these prices.
What the manufactured half actually sells is worth understanding, because it is the reason the business is not a commodity reseller. The filing describes The high-purity materials and customized solutions we offer are highly exacting and complex due to demanding customer specifications and stringent regulatory and industry requirements. Read that as a description of switching costs. A biologics manufacturer that has validated a buffer, a resin or a single-use component into a regulated production process does not re-qualify a substitute to save a few points on price, because the re-qualification costs more than the saving and puts a filing at risk. Avantor says it is engaging with our customers early in their product development cycles to advance their programs from research and discovery through development and commercialization, which is precisely where that lock-in is set.
The distance between Avantor and its larger comparables is structural rather than managerial, and the bull case does not require closing it. WST converts about 20.3% of sales into operating profit, DHR 19.2%, TMO 17.5%, RVTY 12.4%. Avantor's through-the-cycle economics sit near a tenth of every sales dollar, for the unremarkable reason that roughly 47% of its revenue is third-party product it distributes rather than makes, and distribution does not earn manufacturing economics anywhere on earth. The claim is not that the gap closes. It is that the mix tilts toward the half that earns more, and that today's price pays as though it never will.
Management is rebuilding the cost base rather than waiting for demand to rescue it. Effective January 1, 2024 the company transitioned to a new operating model consisting of two complementary business segments and, in its own words, launched a multi-year cost transformation initiative. The arithmetic on that is not glamorous but it is large: on revenue near 6.6 billion dollars, one point of operating improvement is worth something close to 66 million a year against a market value of 7.7 billion. Cost programmes are the one lever a leveraged company can pull without permission from anybody.
Bear Case
The demand problem here is not only the cycle. Organic sales fell 4.1% in the first quarter of 2026, and over a comparable stretch the larger companies selling into the same laboratories grew: TMO by 5.4% year over year, DHR by 4.0%, WST by 11.2%, and RGEN by 17.4% on a far smaller base. When the market expands and one participant contracts, the usual explanation is share. Share lost in a business built on catalogue breadth and renewal cycles does not come back in a quarter, because it leaves through hundreds of individual purchasing decisions rather than one contract.
The contractual position offers little protection against that drift. The annual report states plainly that our customers are generally not obligated to purchase any fixed quantities of products, and they may stop placing orders, and warns separately that results could be negatively affected by the loss of revenue from a significant number of our customers, including direct distributors and end users. Revenue of this kind is renewable, not contracted. It is also concentrated in the half of the company that is easiest to move, since a resold third-party product is by definition available from somebody else.
Debt converts that demand problem into a structural one. Net debt runs near 3.56 billion dollars against a market value of 7.7 billion, or 5.51 times operating profit measured through the cycle. Against the trailing year there is no ratio at all, because the trailing year produced an operating loss. The credit agreement has tightened around this position: following the refinancing, the leverage-based financial covenant in the credit facility agreement became a full-time financial maintenance covenant, and the company owes additional prepayments if we generate excess cash flows at levels tied to its net leverage. The filing lists among the consequences of its indebtedness placing us at a competitive disadvantage compared to any of our less leveraged competitors. The less leveraged competitors are the ones named two paragraphs up.
Set all of that against what the price requires. Today's quote embeds operating profit compounding roughly 8.7% a year over a five-year stretch, measured from through-the-cycle earning power rather than from the reported loss. The demonstrated direction is the opposite one, and the revenue trend the cash-flow methods take as their starting point is negative. If the compounding does not arrive, there is not much underneath the price to catch it: it sits about 1.5 times above where the asset-value methods land and roughly 1.7 times above the forward-growth methods.
The concession is genuine and should be stated. The impairment was non-cash, free cash flow is positive, and a supplier of validated consumables into regulated production does not disappear. But the bear thesis does not require disappearance. It requires only that the resold half keeps leaking share while the borrowings sit there earning nothing for an equity holder. Capitalize the free cash flow this business actually produced at the return an equity investor would demand, subtract what the company owes, and most of the answer is the debt.
Valuation
One accounting event distorts both sides of this picture, so it belongs at the front. Fiscal 2025 carries a goodwill impairment charge of $ 785.0 million related to our Distribution reporting unit and, separately, Amortization expense was $ 301.1 million in 2025. Between them they convert a cash-generative year into a reported operating loss. The market is not pricing that loss. It is paying about 18 times what the business earns across a full cycle, and that multiple embeds operating profit compounding roughly 8.7% a year over a five-year stretch. Whether that cycle-average base is the honest one, or a memory of trading conditions that are not coming back, is the argument sitting underneath everything else in this report.
Only one family of method lands above today's price, and how it gets there matters. Because the trailing year shows negative earnings, the peer-multiple comparison falls back to a sector sales multiple applied to the entire revenue line. A company that resells roughly 47% of what it ships does not carry a sales multiple built for software-like economics, and never has. Set that read aside and nothing reaches the price. It sits about 1.5 times above where the asset-value methods land, roughly 1.7 times above the forward-growth methods, and more than six times above the midpoint of the earnings-power methods.
That last spread is the most informative thing on the page, and it is worth taking apart rather than reciting. Capitalize a normalized operating profit, averaged over several years with one-time charges added back, and the answer lands slightly above today's price. Capitalize the free cash flow the business actually produced, at the return an equity holder would require, then subtract the 3.56 billion dollars owed, and the answer lands at a small fraction of it. The gap between those two readings is the debt, plus one unresolved question: is normalization a forecast or a memory?
The requirement itself is unusually easy to state. Operating profit has to compound about 8.7% a year over a five-year stretch from through-the-cycle earning power. Measured against Avantor's own record that pace is not extreme. Measured against what is happening now it is: organic sales fell 4.1% in the first quarter of 2026. The price asks for compounding and the business is delivering contraction, and no amount of patience reconciles those two without something changing first.
The comparable set frames the position without needing commentary. TMO converts about 17.5% of sales into operating profit on $45.2 billion of revenue; DHR 19.2% on $24.8 billion; WST 20.3% on $3.2 billion; RVTY 12.4% on $2.9 billion, and all four are growing. Avantor earns near a tenth of a sales dollar through the cycle and its recent growth is negative. The market is not overlooking that difference. It is charging for it.
The balance sheet then sets how much time the thesis has to work. Net debt near 3.56 billion dollars sits against liquid assets of roughly 279 million, interest is covered 3.7 times, and the company is not burning cash. The share count has barely moved in four years, so nothing here has been funded by diluting holders. What the borrowing removes is optionality. A company at 5.51 times operating profit, with a full-time maintenance covenant and a clause that sweeps surplus cash toward lenders, does not get to buy or build its way out of a share-loss problem on its own schedule.
Catalysts
The next scheduled disclosure is close. Avantor reports second-quarter 2026 results before the market opens on July 29, 2026, with a call at 8:00 a.m. Eastern the same morning.
The first quarter set the terms of that print. Net sales came to $1,581.4 million, flat against the prior year on a reported basis but down 4.1% organically once currency is removed, with net income of $43.3 million and diluted GAAP earnings of $0.06 a share. The split by segment matters more than the total: VWR Distribution and Services sold $1,150.0 million, down 4.8% organically, while Bioscience and Medtech Products sold $431.4 million, down 2.0% organically. Chief executive Emmanuel Ligner said first-quarter results exceeded the company's expectations on improved execution in Bioscience and Medtech Products, with stabilization in VWR. Management reaffirmed the full-year 2026 guidance it first gave on the February 11, 2026 fourth-quarter call.
Two things in the July release will move the argument more than the headline. The first is whether the organic decline narrows in the distribution segment, since that is where the share question lives and where four fifths of the volume sits. The second is cash timing. First-quarter operating cash flow was 58.7 million dollars and free cash flow 25.2 million, a small fraction of the trailing-year total, which tells you this company's cash conversion is heavily weighted to the back half. With a covenant tested continuously and a sweep that routes surplus cash to lenders, the shape of that conversion through the rest of 2026 is not a detail.
Peer Cohorts (Per Segment, With Filing Citations)
Laboratory Solutions (reported)
- TMO (THERMO FISHER SCIENTIFIC INC.)
- FY2025 10-K: …clinical, healthcare, academic, and government markets. Life Sciences Solutions includes three primary businesses: biosciences, genetic sciences, and bioproduction. 3 THERMO FISHER SCIENTIFIC INC. Our biosciences business includes reagents, instruments and consumables that help our customers conduct biological and…
- FY2025 10-K: …Laboratory Products and Biopharma Services: offers virtually everything needed for the laboratory. Our unique combination of self-manufactured and sourced products and extensive service offering enables our customers to focus on their core activities and helps them to be more innovative, productive and…
- DHR (Danaher Corporation)
- FY2025 10-K: …the equipment sold by the Company are typically critical to the use of the equipment and are typically used on a one-time or limited basis, requiring frequent replacement in the customer's operating cycle. Examples of these consumables include reagents used in diagnostic tests, chromatography resins used for research…
- FY2025 10-K: …business of Siemens Healthcare Diagnostics in 2015 and Cepheid in 2016. The Diagnostics segment consists of the molecular diagnostics business and the clinical diagnostics businesses. The molecular diagnostics business is a leading provider of biomedical testing instruments, systems, software and related consumables…
- A (AGILENT TECHNOLOGIES, INC.)
- FY2025 10-K: …provides an extensive services and consumables portfolio that spans the entire lab, in addition to software and laboratory automation solutions, which are designed to improve customer outcomes and represents a broad range of offerings designed to serve customer needs across end-markets and applications. Our services…
- FY2025 10-K: …automation offers automated sample preparation solutions, including liquid handling, plate management, consumables and scheduling software. These solutions range from standalone automation platforms to integrated workflow solutions with seamless integration to our instrumentation. Our Applied Markets segment provides…
- MTD (Mettler-Toledo International Inc.)
- FY2025 10-K: …and Analysis of Financial Condition and Results of Operations under "Results of Operations by Reportable Segment" for detailed results by segment and geographic region. We manufacture a wide variety of precision instruments and provide value-added services to our customers. Our principal products and services are…
- FY2025 10-K: …development and scale-up activities of our customers. Our on-line measurement technologies, based on infrared and laser light scattering, enable customers to monitor chemical reactions and crystallization processes in real time in the lab and plant. In situ samples allow overnight sampling and testing. Additionally,…
- BRKR (BRUKER CORPORATION)
- FY2025 10-K: …products and solutions address the rapidly evolving needs of a diverse array of customers in life and materials science research, biopharmaceuticals, applied markets, microbiology, in-vitro diagnostics, and nanotechnology. Our technology platforms include magnetic resonance, mass spectrometry, gas and liquid…
- FY2025 10-K: …PCR technology. LiquidArray ® uses light-on-off probes, providing a powerful technology to identify a broad number of indicators for different infections or resistance markers from a single sample, providing greater depth of information. Following the acquisition of ELITechGroup in 2024, our portfolio now includes…
- RVTY (REVVITY, INC)
- FY2025 10-K: …Signals Image Artist™, SMARTpool ® , SMARTvector ™ , Spark PLUS™, Spectrum™, TotalSeq™, Tri-Carb ® , Ultra-LEAF™, VariSpec™, Vega ® , VesselVue ® , ViaStain™, VICTOR Nivo ® , Western Lightning ™ , Wizard2 ® , and Zephyr ® . Diagnostics Segment We offer instruments, reagents, assay platforms and software to hospitals,…
- FY2025 10-K: …from bench to clinic. ◦ The JANUS ® BioTx™ and PreNAT II™ workstations for automated small-scale purification, offering column, tip and plate-based chromatography on a single platform. ◦ The LabChip ® GXII Touch™ protein characterization system provides a means of characterizing multiple protein product attributes…
- WAT (Waters Corporation)
- FY2025 10-K: , the ACQUITY UPLC System is also compatible with the Company's software products and the general operating protocols of HPLC. For these reasons, the Company's customers and field sales and support organizations are well positioned to utilize this innovative technology and instrument. Waters manufactures LC…
- FY2025 10-K: …Inc., NETZSCH-Geraetebau GmbH, Malvern PANalytical Ltd., Spectris plc, Anton-Paar GmbH and others not identified here. The market for consumable LC products, including separation columns, is highly competitive and generally more fragmented than the analytical instruments market. The Company encounters competition in…
Bioscience Production (reported)
- RGEN (REPLIGEN CORP)
- FY2025 10-K: …industries, including CDMOs. These direct sales have represented 90.8% of our total product revenue during 2025 compared to 89.7% of our total product revenue in 2024. Sales of our bioprocessing products can be impacted by the timing of large-scale production orders which may result in significant quarterly…
- FY2025 10-K: …well-suited for new modality applications, which represent a growing portion of our customers' pipelines. • Targeted acquisitions . We intend to continue to selectively pursue acquisitions of innovative technologies and products that address customer pain points. These can either be complementary to our existing…
- DHR (Danaher Corporation)
- FY2025 10-K: …vaccines and gene editing technologies. Additionally, the segment provides products and consumables used to filter and remove contaminants from a variety of liquids and gases in many end-market applications. As discussed in Note 10 to the accompanying Consolidated Financial Statements, during the third quarter of…
- FY2025 10-K: …related to technology, other intangible assets and a facility in the Biotechnology segment and a facility in the Life Sciences segment, net of impairment charges related to a trade name in each of the Life Sciences and Diagnostics segments in 2024. Refer to Note 10 to the accompanying Consolidated Financial…
- TMO (THERMO FISHER SCIENTIFIC INC.)
- FY2025 10-K: …clinical, healthcare, academic, and government markets. Life Sciences Solutions includes three primary businesses: biosciences, genetic sciences, and bioproduction. 3 THERMO FISHER SCIENTIFIC INC. Our biosciences business includes reagents, instruments and consumables that help our customers conduct biological and…
- FY2025 10-K: …our customers to make the world healthier, cleaner and safer. We serve customers working in pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental, industrial, research and development, quality and process…
- WST (WEST PHARMACEUTICAL SERVICES, INC.)
- FY2025 10-K: …from smaller regional companies such as SMC Ltd. to large global assembly manufacturers such as Phillips Medisize. Given the cost pressures they face, many of our customers look to reduce costs by sourcing from low-cost locations. We seek to differentiate ourselves by leveraging our global capabilities and reputation…
- FY2025 10-K: …obligations satisfied beyond one year are not material as of December 31, 2025. Our revenue can be generated from contracts with multiple performance obligations. When a sales agreement involves multiple performance obligations, each obligation is separately identified and the transaction price is allocated based on…
- RVTY (REVVITY, INC)
- FY2025 10-K: …cell contamination throughout bioprocessing workflows. 8 Table of Contents Brand Names: Our Life Sciences segment offers additional products under various brand names: Accell™, AlphaLISA ® , AlphaPlex ™ , AlphaScreen ® , Alpha™ SureFire ® , AssayMate™, BIOCHIPs™, BioLegend ® , Bioo Scientific ® , BioQule™, Brilliant…
- FY2025 10-K: …talented and engaged employees; • Accelerating transformational innovation through both internal research and development and third-party collaborations and alliances; • Augmenting growth in both of our core business segments, Life Sciences and Diagnostics, through strategic acquisitions and licensing; • Advancing…
- BRKR (BRUKER CORPORATION)
- FY2025 10-K: …products and solutions address the rapidly evolving needs of a diverse array of customers in life and materials science research, biopharmaceuticals, applied markets, microbiology, in-vitro diagnostics, and nanotechnology. Our technology platforms include magnetic resonance, mass spectrometry, gas and liquid…
- FY2025 10-K: …resources to internal and collaborative research and development projects. This level of investment in research and development has historically exceeded the industry average and reflects our commitment to scientific research and technological advancement to provide innovative products and solutions to our customers…
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.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- 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.
Sources
Avantor press release, July 1, 2026 · Avantor Q1 2026 earnings release, April 29, 2026