A Agilent Technologies
Sticky lab-instrument franchise with real switching costs, but priced for growth the recent trend doesn't support.
The business
Agilent makes analytical instruments (LC/MS, GC, spectroscopy) and related consumables, software, and services for pharma, biotech, chemical, food, and diagnostics labs. Revenue splits between capital equipment sales and a high-margin recurring stream from CrossLab consumables, reagents, and service contracts tied to its installed base.
Quality gate · 86/100
Moat & management
| Moat | narrow moat |
| Source | switching costs |
| Trajectory | stable |
| Management | adequate |
Instruments get embedded into regulated, validated QC/QA workflows in pharma and diagnostics labs, making rip-and-replace costly and slow (revalidation, retraining), which anchors a sticky consumables/service annuity. But Thermo Fisher, Waters, Danaher, and Shimadzu compete hard on the capital equipment side, capping pricing power and keeping the moat narrow rather than wide.
Sensible capital allocation: modest leverage (net debt/EBITDA 0.8), strong FCF conversion (~0.99), and steady buybacks (share count CAGR -1.4%) rather than empire-building M&A.
Owner-earnings inputs
| Owner earnings (TTM) | 1.09B |
| Owner-earnings yield | 2.8% |
| Free-cash-flow yield | 2.8% |
| Growth used (normalized) | 6.0% |
| Market-implied growth (reverse DCF) | 19.5% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 10.2% |
Projected owner earnings
| Yr | Owner earnings | Growth | PV |
|---|---|---|---|
| 1 | 1.15B | 6.0% | 1.05B |
| 2 | 1.22B | 5.8% | 1.00B |
| 3 | 1.29B | 5.6% | 962.65M |
| 4 | 1.36B | 5.4% | 920.70M |
| 5 | 1.43B | 5.1% | 878.78M |
| 6 | 1.50B | 4.9% | 837.07M |
| 7 | 1.57B | 4.7% | 795.71M |
| 8 | 1.64B | 4.5% | 754.84M |
| 9 | 1.71B | 4.3% | 714.61M |
| 10 | 1.78B | 4.1% | 675.13M |
| 11 | 1.84B | 3.9% | 636.51M |
| 12 | 1.91B | 3.6% | 598.87M |
| 13 | 1.98B | 3.4% | 562.29M |
| 14 | 2.04B | 3.2% | 526.85M |
| 15 | 2.10B | 3.0% | 492.61M |
Key risks
- Prolonged pharma/biotech capex cycle weakness and China life-sciences demand softness, as reflected in near-flat 5y revenue CAGR
- Intensifying competition from Thermo Fisher, Danaher, and Waters compressing instrument pricing and share
- Regulatory/funding shifts (NIH, biotech VC funding cycles) that swing customer capex unpredictably
Catalysts
- Cyclical recovery in pharma/biotech instrument capex and China demand normalization
- Growing mix shift toward higher-margin recurring consumables, software, and diagnostics/genomics
Recent news
score · 8 articles
- DENTSPLY SIRONA to Post Q2 Earnings: What's in Store for the Stock?
- Agilent Technologies (A) Expands Its Oncology Diagnostics Reach—Can Growth Keep Up?
- Cencora to Report Q3 Earnings: Is a Beat Likely for the Stock?
- Solventum to Report Q2 Earnings: What's in Store for the Stock?
- Thermo Fisher Raises 2026 Outlook After Strong Second-Quarter Results
- How Thermo Fisher Is Riding Bioproduction and AI-Led Growth Trends
- Stryker (SYK) Q2 Earnings and Revenues Beat Estimates
- Avantor Stock Surged Because One Segment Stopped Shrinking
⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Price pays for ~20%/yr owner-earnings growth over 15y (reverse DCF); model credits 6%. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.