Bio-Rad Laboratories, Inc. (BIO): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/BIO

Headline

Field	Value
Ticker	BIO
Company	Bio-Rad Laboratories, Inc.
Sector / Industry	Technology
Current price	$329.94/sh
Composition	Life Science 40% / Clinical Diagnostics 60% / Other Operations 0%

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)	13.4%
Operating margin (mid-cycle)	10.2%
Margin expansion (value-band)	+3.2pp
Trailing margin (depressed year)	2.2%
Implied growth	9.4%
Multiple paid	18x 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 8.6% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.7pp.

How unusual the bet is: within-range

Reference	Value
vs own history	+0.45σ
cohort percentile (of 190 peers)	26
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and relative-multiple value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.

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	0.77x	4	justifies
Earnings	3.76x	5	expensive
Relative	1.21x	2	expensive
Growth	1.45x	3	expensive

Families that justify the price: Asset, Relative Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.

Per-Model Detail (n=14)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$180.41	1.83x	yes	FCF base $0.4B, growth 2% (input: historical growth), terminal g 1.9%, WACC 8.1%, 5yr projection
DCF Exit Multiple	Growth	$286.78	1.15x	yes	Exit EV/EBITDA: 167.5x / 169.5x / 171.5x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$316.97	1.04x	yes	P/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 26.4x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$359.52	0.92x	yes	BV/sh $254.15, ROE (TTM) 13.1%, ke 9.3%
Two-Stage Excess Return	Asset	$423.97	0.78x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$227.03	1.45x	yes	Rev $2.6B, growth 2% (input: historical growth; tapered), Terminal P/S: 2.9x / 3.4x / 4.0x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/E	Relative	—	—	no	—
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$81.25	4.06x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.31B × (1−21%) / WACC 8.1% → EPV (no growth)
Residual Income	Asset	$437.69	0.75x	yes	BV $254.15 + 5yr PV of (ROE (TTM) 13.1% − Kₑ 9.3%) × BV; BV grows 8.5%/yr
Graham Number	Asset	$434.41	0.76x	yes	√(22.5 × EPS $33.00 × BVPS $254.15) — Graham's conservative floor
EV/EBITDA Relative	Relative	$0.01	32994.00x	yes	EBITDA $0.06B × sector EV/EBITDA 12.0x (excluded from median)
FCF Yield	Earnings	$110.94	2.97x	yes	FCF $357.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$87.80	3.76x	yes	SBC-adj FCF $0.30B (FCF $0.36B − SBC $0.06B) capitalized at Kₑ
Ben Graham Formula	Earnings	$27.66	11.93x	yes	EPS $33.00 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$10.94	30.16x	yes	BV $254.15 × (ROIC 0.3% / WACC 8.1%) (excluded from median)
P/Sales Sector	Relative	$240.18	1.37x	yes	Revenue $2.59B × sector P/S 2.5x
PEG Fair Value	Relative	—	—	no	—
Earnings Yield	Earnings	$356.77	0.92x	yes	EPS $33.00 / 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 cash	$352.2m
Net debt / NOPAT (after-tax)	-1.69x (net cash)
Net debt / operating income (pre-tax)	-1.33x (net cash)
Interest coverage	5.4x
Share count CAGR (buyback)	-2.6%
Burning cash	no

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 10.2%); the trailing year was depressed.

Bullet Takeaways

• Management cut the full-year outlook in April, guiding 2026 currency-neutral revenue to a range running from minus 3% to plus 0.5%, with Life Science at minus 3% to minus 1%.
• Roughly three fifths of the company's market value is an equity stake in another business rather than the laboratory operation itself, and a $562 million swing in the value of that stake drove the reported first-quarter loss.
• The demand risk is stated plainly in the annual report: "Reductions in government funding and the capital spending programs of our customers have negatively impacted our revenue and could have a material adverse effect on our business, results of operations or financial condition."

Bull Case

The case against this company writes itself. Revenue is not growing, the April guidance cut put full-year currency-neutral growth in a range that starts at minus 3%, the trailing operating margin is about 8.1%, and the whole enterprise appears to hinge on the price of a German share it does not control. Every one of those statements is true. What they miss is what an investor is actually buying at $314.74.

Back out the equity stake, which is close to 5 billion dollars of value sitting outside the laboratory business, and the operating company is being carried at roughly 4.4 billion dollars. That is under two times its revenue for a business whose gross margin is still above half of sales, at "51.9" percent in 2025. Clinical Diagnostics, the larger of the two segments at about 60% of revenue, sells into the least discretionary spending in medicine: the filing describes products "marketed and supported test systems, informatics systems, test kits and specialized quality controls that serve clinical laboratories in the global diagnostics market" sold to hospital and reference laboratories. Quality-control reagents for blood typing do not get deferred because a research budget was trimmed.

The cost side is where the case actually rests, and management has been moving. Restructuring charges of "$ 48.9 million, primarily representing estimated termination benefits to employees" ran through 2025, research spending came down as a share of sales from 11.5% to 10.7%, and the company wrote off "$ 127.7 million" of in-process research it decided to abandon in Clinical Diagnostics rather than keep funding. Writing off a program you no longer believe in is unglamorous and it is the right call. The 2026 plan calls for free cash flow between $290 million and $340 million out of a business the market is valuing, net of investments, at a little over four billion.

Capital allocation reinforces the point. The share count has been falling about 2.6% a year for four years. Nobody buys back stock at that pace by accident, and in a family-controlled company with dual-class shares the buyback is the clearest available statement of where insiders think value sits.

Finally, the stake itself is not a hostage. It is a holding management has described as monetizable, and the annual report shows the company already borrowing against related interests, with a loan of "€ 400 million due on January 31, 2029" secured on trust interests that convert to Sartorius ordinary shares. An asset you can borrow against on those terms is an asset with real optionality, whatever the mark does quarter to quarter. The bear reads the volatility of that mark as risk. The alternative read is that a diagnostics business trading at a modest multiple of its own cash generation comes with a large, liquid-adjacent financial asset attached, and the market is pricing the pair as though it only has to underwrite the worse half.

Bear Case

The variable with the most leverage over this business is not competition or technology. It is a line item in somebody else's budget. Bio-Rad states it directly in the annual report: "Reductions in government funding and the capital spending programs of our customers have negatively impacted our revenue and could have a material adverse effect on our business, results of operations or financial condition." Its customers, as the filing lists them, include "universities, clinical diagnostics laboratories, government agencies, hospitals and pharmaceutical" companies. When research appropriations tighten, orders for instruments do not shrink proportionally. They stop, because a laboratory that cannot fund a new grant simply does not buy the instrument at all. The current price does not appear to carry much of that exposure.

The company also faces the government on the other side of the transaction, as a price setter rather than a funder. The most recent year saw currency-neutral diagnostics sales held back by "lower reimbursement rates for diabetes testing in China", and the filing warns of measures "which could limit the amounts that governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures." A diagnostics company whose volumes are set by health systems and whose prices are set by health ministries has two independent regulators on the same revenue line.

That is the setting in which the price makes its demand. At around 22 times the operating profit of the underlying business, the price implies company-wide operating profit growing about 14.8% a year for five years. Against that, management has just guided full-year currency-neutral revenue to somewhere between minus 3% and plus 0.5%. Those two statements can only be reconciled through margin: operating profit has to climb from about 8.1% of sales toward something above 13% while sales go nowhere. Restructuring can deliver part of that. It cannot deliver all of it on a flat top line, and the estimate is fragile in a way worth naming: a single percentage point of cost of capital moves the implied growth requirement by more than seven points.

Cost discipline is also running uphill. Gross margin fell to "51.9" percent of sales in 2025 from 53.7% the year before, while selling and administrative expense rose to 32.7% from 31.7%. Costs going up as a share of a flat revenue base is the arithmetic of operating deleverage, and it is the opposite of what the price requires.

Then there is the cohort. Among the companies Bio-Rad is measured against, A converts 21.5% of revenue into operating profit while growing 9.1%; VLTO converts 23.1%; DHR 19.2% on revenue of $24.8B; TMO 17.5% on $45.2B. Bio-Rad converts about 8.1%. The gap is not a rounding difference in a tough year. It is a structural difference in what these businesses do with a dollar of sales, and it is why the market pays Bio-Rad a multiple in the lower half of the peer range.

The equity stake, finally, is a floor with an asterisk. Close to 5 billion dollars of value sits outside the operating business, which does bound the downside if the laboratory operation disappoints. But that value is a mark on a listed foreign share, it moved by $562 million against the company in a single quarter, and the annual report notes that the trust interests pledged as loan collateral "are not tradable on the capital markets and may, in case of an enforcement, have to be sold" in some other way. A downside boundary that reprices with a foreign biotech-equipment cycle is a boundary that moves in the same direction as the thing it is supposed to protect against.

Valuation

There are two companies inside this ticker and only one of them makes anything. The laboratory business, Clinical Diagnostics at roughly 60% of revenue and Life Science at roughly 40%, produced about $2.59 billion of sales and a trailing operating margin near 8.1%. Alongside it sits an equity stake worth close to 5 billion dollars, which is roughly three fifths of the entire market value. Any read of the price has to separate them first, because a multiple computed across both is a multiple of nothing in particular.

Do the separation and the operating business is carried at roughly 4.4 billion dollars, or about 22 times its trailing operating profit. What the price then implies is company-wide operating profit compounding at about 14.8% a year for five years. That is a single calculation under fixed assumptions rather than a measurement, and it is a sensitive one: a percentage point of cost of capital moves the implied growth rate by more than seven points. Treat the shape as informative and the decimals as not.

The unusual part is that this requirement is not extreme by historical standards. Roughly half of comparable fast growers sustained that pace for five years, and the multiple sits in the lower half of its peer range. The demand is not that Bio-Rad becomes an exceptional company. It is that Bio-Rad becomes an ordinary one for its industry. Operating profit would have to rise from the single-digit share of sales it takes today to something in the low teens, which is roughly where the peer set already sits.

The methods split accordingly. The approaches that capitalize what the company currently earns land far below the price, with the price sitting roughly three and a half times above them, which is what happens when a business earns a single-digit margin in a mid-cycle year. Peer multiples land close, with the price about 15% above them. The forward-growth approaches land below the price as well, since they carry the recent revenue trajectory forward at low single digits rather than the acceleration the price needs. Only the methods that value the company against its own book land above the price, and that is less an endorsement than a reminder of what the book contains: a majority of it is an investment portfolio marked at fair value, not laboratory equipment.

Peer conversion rates make the gap concrete rather than abstract. A runs a 21.5% operating margin, VLTO 23.1%, DHR 19.2%, TMO 17.5%. All four sell instruments and consumables into overlapping customer bases. The distance between their conversion and Bio-Rad's is the single largest fact in this valuation, and closing it is the entire content of the price.

On the balance sheet, cash and short-term investments of about 1.56 billion dollars sit against roughly 1.21 billion dollars of funded borrowings, and operating profit covers interest about four times over. The company is not consuming cash, and the share count has been shrinking about 2.6% a year. The financial position is comfortable enough that the question the price poses is entirely operational: whether a company whose sales are guided flat to lower can widen its margin by five points anyway.

Catalysts

The April print was the one that reset expectations. First-quarter sales were $592.1 million, up 1.1% as reported but down 4.2% on a currency-neutral basis, with both segments seeing softer demand. Alongside it management lowered the 2026 outlook to currency-neutral revenue growth of minus 3% to plus 0.5%, split as minus 3% to minus 1% for Life Science and minus 3% to plus 1% for Clinical Diagnostics, with free cash flow guided to $290 million to $340 million. The shares fell about 10% on the day.

That mark moves with a listed European share and has nothing to do with how many test kits Bio-Rad sold. It will keep producing headline swings in both directions, and management has described the holding as monetizable, which is the more consequential statement of the two.

For the rest of the year the two things worth separating are volume and price. Research-funded instrument demand responds to appropriations with a lag, so orders booked now reflect budget decisions already made. Diagnostics volumes are steadier but the pricing is administered, and the annual report has already flagged lower Chinese reimbursement for diabetes testing as a drag on the most recent year. A quarter that shows currency-neutral growth at the upper end of guidance would say the funding cycle has stopped tightening; one at the lower end would say the margin expansion the price requires has to come entirely from cost.

Peer Cohorts (Per Segment, With Filing Citations)

Life Science (reported)

• BRKR (BRUKER CORPORATION)
• FY2025 10-K: …continue. If we fail to compete effectively, it could harm our business results and materially impact the value of our company. We face substantial competition in our industries, and we expect that competition in all of our markets will increase further. Currently, our principal competition comes from established…
• FY2025 10-K: …to generate revenues from our backlog or obtain new orders and could have a material adverse effect on our business, results of operations, financial condition and cash flows. If employees were to engage in a strike or other work stoppage or interruption, our business, results of operations, financial condition and…
• A (AGILENT TECHNOLOGIES, INC.)
• FY2025 10-K: , electronic commerce and direct sales. 7 Table of Contents Life Sciences and Diagnostics Markets - Manufacturing Our manufacturing supports our diverse product range and customer-centric focus. We assemble highly configurable products to individual customer orders and make standard products to stock. We employ…
• FY2025 10-K: Life Sciences and Diagnostics Markets and Applied Markets segments, such as: Danaher Corporation, PerkinElmer Inc., Shimadzu Corporation, Thermo Fisher Scientific Inc. and Waters Corporation, as well as numerous niche service providers. We compete on the basis of product performance, reliability, support quality,…
• MTD (Mettler-Toledo International Inc.)
• 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,…
• FY2025 10-K: …constraints on the sources and availability of 9 Table of Contents materials. From time to time, we may rely on a single supplier for all of our requirements of a particular component. Supply arrangements for electronic components are generally made globally. Backlog; Seasonality Our manufacturing turnaround time is…
• WAT (Waters Corporation)
• FY2025 10-K: …segment for financial statement purposes. Operations of the Wyatt business are part of the Waters operating segment. Following the closing of the BDS Business Acquisition in February 2026, the Company has reorganized the existing and new business units into the following four segments: Waters Analytical Sciences,…
• FY2025 10-K: …and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research. The Company is also a developer and supplier of advanced software-based products that interface with the Company's instruments, as well as other manufacturers' instruments. Waters Corporation,…
• RVTY (REVVITY, INC)
• 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…
• 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…
• VLTO (VERALTO CORPORATION)
• FY2025 10-K: …Environmental & Applied Solutions segment since July 2022. Prior to that, Ms. Honeycutt has served in leadership positions in a variety of different functions and businesses since joining Danaher in 1999, including most recently as Executive Vice President for Danaher's Life Sciences Tools Platform and Global High…
• FY2025 10-K: …activities. WQ focuses on what management believes are the most attractive sub-segments of the water value chain helping our customers address some of their most pressing and complex challenges, such as water scarcity, water safety, severe weather events and management of precious natural resources. Our businesses…

Clinical Diagnostics (reported)

• TMO (THERMO FISHER SCIENTIFIC INC.)
• FY2025 10-K: …receivable and inventories, which are regularly provided to the CODM. Geographical revenues are attributed to countries based on customer location. Long-lived assets by geographical location includes property, plant and equipment, net, and operating lease ROU assets. Business Segment Information 2025 (In millions)…
• FY2025 10-K: …offset by declines in the chemical analysis business. On a reported basis, the electron microscopy business and chromatography and mass spectrometry business grew $87 million and $83 million, respectively, partially offset by a decline of $78 million in the chemical analysis business. The decrease in segment income…
• DHR (Danaher Corporation)
• 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…
• FY2025 10-K: …needs of the food and beverage markets, helping customers ensure the quality and safety of their products while lowering operating costs and minimizing waste. Customers served by the Life Sciences segment select products based on a number of factors, including product quality and reliability, the product's capacity…
• A (AGILENT TECHNOLOGIES, INC.)
• FY2025 10-K: …by offering antibodies as raw materials and a range of associated assay development services and solutions. We operate in several areas of clinical relevance for the customers and address multiple technologies such as turbidimetry, gel techniques and chemiluminescence immunoassays. In the area of flow cytometry…
• FY2025 10-K: Life Sciences and Diagnostics Markets and Applied Markets segments, such as: Danaher Corporation, PerkinElmer Inc., Shimadzu Corporation, Thermo Fisher Scientific Inc. and Waters Corporation, as well as numerous niche service providers. We compete on the basis of product performance, reliability, support quality,…
• MTD (Mettler-Toledo International Inc.)
• 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,…
• FY2025 10-K: …capabilities enable improved asset management solutions for our customers to reduce process downtime and maintenance costs. Our instruments offer leading multi-parameter capabilities and plant-wide control system integration, which are key for integrated measurement of multiple parameters to secure production quality…
• WAT (Waters Corporation)
• FY2025 10-K: …strategies of the Company's customers, which in turn could adversely impact the Company's results of operations or financial condition. The Company typically experiences seasonality in its orders that is reflected as an increase in sales in its fourth quarter as a result of purchasing habits for capital goods by…
• FY2025 10-K: …integrated and used along with other complementary analytical instruments and systems, such as LC, chemical electrophoresis and gas chromatography. A wide variety of instrumental designs fall within the overall category of MS instrumentation, including devices that incorporate quadrupole, ion trap, time-of-flight…
• 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: …the way that management organizes the segments within the Company for making operating decisions and assessing financial performance. The CODM of the Company is the Chief Executive Officer ("CEO"). The CEO evaluates the performance of its operating segments based on revenue and operating income as adjusted for…

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.

Sources

Bio-Rad Q1 2026 results, April 2026 · Bio-Rad 2026 outlook, April 2026 · Bio-Rad Q1 2026 earnings call, April 2026 · Bio-Rad Q1 2026 market reaction, April 2026