QS Research · Michael Burry's Scion Capital analyst template · 2006
THERMO FISHER SCIENTIFIC INC. (TMO)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case 0% · downside -11% · upside +6%
Using section 13's TTM base, EBITDA of $11.57B (N14) at today's 25.5x EV/EBITDA (N28) gives $295.0B EV; after $37.31B net debt (N24) and $1.47B leases (N23), equity is $256.3B, or ~$692/share on 370.52M shares (N5), about -0.4% versus $694.76 (N1). A downside where EBITDA reverts to the FY2025 level of $10.53B ($7.75B operating income + $1.73B amortization + $1.05B depreciation, S24) at the same 25.5x gives ~$620/share, down 10.8%. An upside using 4% organic growth and Q3 2026's 18.6% GAAP margin (S29/S101) on $49.24B revenue plus $3.11B D&A (N13) gives ~$12.27B EBITDA and ~$740/share, up 6.5%. The market is not missing a bargain: Q3 2026 was a real beat with 6% organic growth and a reported 4% FY2026 organic raise (S65/S64), but 36.4x TTM P/E (N31), 25.5x EV/EBITDA (N28), a 3.0% FCF yield (N32) and $37.31B net debt (N24) already price that in while GAAP operating income remains below FY2021 (S24/S28). I pass: base is roughly flat, downside ~-11%, upside ~+6.5%, so neither the long nor short rule is met.
Key numbers
- Share price: $694.76
- Market cap: $257.42B
- Latest financial period: TTM to Sep 26, 2026
- Revenue (TTM): $47.35B
- EV / EBITDA (TTM): 25.5x
- P/E (TTM): 36.4x
- Price / book: 4.70x
The 15 boxes
- ✓ 1. Long-form business notes
Thermo Fisher is a four-segment life-science tools and services company: Life Sciences Solutions (biosciences, genetic sciences, bioproduction), Analytical Instruments (chromatography/mass spec, chemical analysis, electron microscopy), Specialty Diagnostics (five businesses) and Laboratory Products and Biopharma Services (lab products, research and safety channel, pharma services, clinical research). Revenue grew from $32.22B in FY2020 to a $44.91B peak in FY2022, then fell to $42.86B (FY2023) and $42.88B (FY2024) before $44.56B in FY2025, while FY2025 operating income of $7.75B is still below the $10.03B of FY2021. Between the FY2020 and FY2025 10-Ks the reporting renamed one segment (Laboratory Products and Services to Laboratory Products and Biopharma Services), folded clinical next-generation sequencing out of the Life Sciences business list, added PPD to the brand list, and headcount rose from 'more than 80,000' (FY2020) to approximately 125,000 at December 31, 2025. Cash generation has softened — operating cash flow $7.82B in FY2025 versus $8.67B in FY2024 and $9.31B in FY2021 — with $3.00B of buybacks and a $1.52B capex budget in FY2025.
- ✓ 2. Competitive advantage
The sources do not establish a durable moat: TMO is described as facing aggressive competition in virtually all markets, with success driven by product performance, differentiation, reliability, reputation, service and price. Margins reset lower from the FY2021 peak, and the balance sheet is acquisition-built with $49.36B goodwill at Dec 31 2025. Cash generation is solid ($7.82B FY2025 operating cash flow) but returns are moderate, not exceptional.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 9% reported and 6% organic to $12.14B; nine-month revenue rose 9% reported and 4% organic. Margins expanded, with Q3 2026 adjusted operating margin at 24.5% and nine-month at 23.1%; GAAP included one-off credits/gains and tax items. Cash fell and debt rose after $8.88B of nine-month acquisitions and $4.00B of buybacks; nine-month free cash flow was $4.62B. No numeric annual revenue/EPS guidance appears in the 10-Q or same-quarter release, while the 10-Q gives tax/capex outlook and the computed risk-factor diff flags tariffs and China-localization items.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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