Intrinsic value of Thermo Fisher Scientific - TMO

Previous Close

$231.61

  Intrinsic Value

$95.77

stock screener

  Rating & Target

str. sell

-59%

Previous close

$231.61

 
Intrinsic value

$95.77

 
Up/down potential

-59%

 
Rating

str. sell

We calculate the intrinsic value of TMO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 91.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.50
  13.55
  12.70
  11.93
  11.23
  10.61
  10.05
  9.54
  9.09
  8.68
  8.31
  7.98
  7.68
  7.41
  7.17
  6.96
  6.76
  6.58
  6.43
  6.28
  6.15
  6.04
  5.94
  5.84
  5.76
  5.68
  5.61
  5.55
  5.50
  5.45
Revenue, $m
  23,951
  27,196
  30,649
  34,304
  38,158
  42,206
  46,447
  50,880
  55,505
  60,323
  65,337
  70,552
  75,972
  81,605
  87,459
  93,543
  99,866
  106,442
  113,282
  120,400
  127,810
  135,529
  143,574
  151,961
  160,711
  169,843
  179,377
  189,337
  199,745
  210,626
Variable operating expenses, $m
  18,648
  20,606
  22,689
  24,894
  27,219
  29,662
  32,221
  34,895
  37,686
  40,592
  39,420
  42,567
  45,837
  49,236
  52,768
  56,438
  60,253
  64,221
  68,348
  72,642
  77,113
  81,770
  86,624
  91,684
  96,963
  102,473
  108,225
  114,235
  120,514
  127,079
Fixed operating expenses, $m
  1,190
  1,216
  1,243
  1,270
  1,298
  1,326
  1,356
  1,385
  1,416
  1,447
  1,479
  1,511
  1,545
  1,579
  1,613
  1,649
  1,685
  1,722
  1,760
  1,799
  1,838
  1,879
  1,920
  1,962
  2,006
  2,050
  2,095
  2,141
  2,188
  2,236
Total operating expenses, $m
  19,838
  21,822
  23,932
  26,164
  28,517
  30,988
  33,577
  36,280
  39,102
  42,039
  40,899
  44,078
  47,382
  50,815
  54,381
  58,087
  61,938
  65,943
  70,108
  74,441
  78,951
  83,649
  88,544
  93,646
  98,969
  104,523
  110,320
  116,376
  122,702
  129,315
Operating income, $m
  4,113
  5,375
  6,717
  8,140
  9,640
  11,218
  12,871
  14,599
  16,403
  18,283
  24,438
  26,474
  28,590
  30,791
  33,078
  35,456
  37,928
  40,499
  43,174
  45,959
  48,859
  51,880
  55,030
  58,315
  61,742
  65,320
  69,057
  72,962
  77,043
  81,311
EBITDA, $m
  13,113
  15,025
  17,060
  19,215
  21,488
  23,877
  26,381
  28,998
  31,729
  34,575
  37,538
  40,619
  43,823
  47,153
  50,614
  54,211
  57,951
  61,841
  65,887
  70,099
  74,485
  79,054
  83,816
  88,783
  93,965
  99,373
  105,022
  110,924
  117,092
  123,541
Interest expense (income), $m
  458
  1,134
  1,381
  1,644
  1,922
  2,218
  2,529
  2,856
  3,199
  3,557
  3,930
  4,319
  4,725
  5,146
  5,584
  6,039
  6,512
  7,003
  7,514
  8,045
  8,598
  9,173
  9,771
  10,395
  11,045
  11,722
  12,429
  13,167
  13,937
  14,741
  15,582
Earnings before tax, $m
  2,979
  3,993
  5,074
  6,217
  7,423
  8,689
  10,015
  11,401
  12,846
  14,353
  20,118
  21,749
  23,445
  25,207
  27,039
  28,944
  30,925
  32,985
  35,129
  37,361
  39,686
  42,109
  44,635
  47,270
  50,020
  52,891
  55,890
  59,025
  62,302
  65,729
Tax expense, $m
  804
  1,078
  1,370
  1,679
  2,004
  2,346
  2,704
  3,078
  3,469
  3,875
  5,432
  5,872
  6,330
  6,806
  7,301
  7,815
  8,350
  8,906
  9,485
  10,088
  10,715
  11,369
  12,051
  12,763
  13,505
  14,281
  15,090
  15,937
  16,821
  17,747
Net income, $m
  2,175
  2,915
  3,704
  4,539
  5,419
  6,343
  7,311
  8,322
  9,378
  10,478
  14,686
  15,877
  17,115
  18,401
  19,739
  21,129
  22,575
  24,079
  25,644
  27,274
  28,971
  30,740
  32,584
  34,507
  36,515
  38,611
  40,800
  43,088
  45,480
  47,982

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  64,908
  73,703
  83,060
  92,965
  103,408
  114,379
  125,873
  137,886
  150,419
  163,476
  177,065
  191,197
  205,886
  221,152
  237,016
  253,503
  270,641
  288,461
  306,997
  326,286
  346,369
  367,288
  389,089
  411,819
  435,531
  460,278
  486,117
  513,108
  541,315
  570,803
Adjusted assets (=assets-cash), $m
  64,908
  73,703
  83,060
  92,965
  103,408
  114,379
  125,873
  137,886
  150,419
  163,476
  177,065
  191,197
  205,886
  221,152
  237,016
  253,503
  270,641
  288,461
  306,997
  326,286
  346,369
  367,288
  389,089
  411,819
  435,531
  460,278
  486,117
  513,108
  541,315
  570,803
Revenue / Adjusted assets
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
Average production assets, $m
  48,022
  54,529
  61,451
  68,780
  76,506
  84,623
  93,126
  102,014
  111,287
  120,947
  131,000
  141,456
  152,324
  163,619
  175,355
  187,553
  200,232
  213,416
  227,130
  241,401
  256,260
  271,736
  287,865
  304,682
  322,225
  340,534
  359,651
  379,620
  400,489
  422,305
Working capital, $m
  1,772
  2,013
  2,268
  2,539
  2,824
  3,123
  3,437
  3,765
  4,107
  4,464
  4,835
  5,221
  5,622
  6,039
  6,472
  6,922
  7,390
  7,877
  8,383
  8,910
  9,458
  10,029
  10,624
  11,245
  11,893
  12,568
  13,274
  14,011
  14,781
  15,586
Total debt, $m
  25,581
  30,436
  35,601
  41,069
  46,833
  52,889
  59,234
  65,865
  72,783
  79,991
  87,492
  95,293
  103,401
  111,828
  120,585
  129,686
  139,146
  148,982
  159,214
  169,862
  180,948
  192,495
  204,529
  217,076
  230,165
  243,825
  258,089
  272,988
  288,558
  304,835
Total liabilities, $m
  35,829
  40,684
  45,849
  51,317
  57,081
  63,137
  69,482
  76,113
  83,031
  90,239
  97,740
  105,541
  113,649
  122,076
  130,833
  139,934
  149,394
  159,230
  169,462
  180,110
  191,196
  202,743
  214,777
  227,324
  240,413
  254,073
  268,337
  283,236
  298,806
  315,083
Total equity, $m
  29,079
  33,019
  37,211
  41,648
  46,327
  51,242
  56,391
  61,773
  67,388
  73,237
  79,325
  85,656
  92,237
  99,076
  106,183
  113,569
  121,247
  129,230
  137,535
  146,176
  155,173
  164,545
  174,312
  184,495
  195,118
  206,204
  217,780
  229,872
  242,509
  255,720
Total liabilities and equity, $m
  64,908
  73,703
  83,060
  92,965
  103,408
  114,379
  125,873
  137,886
  150,419
  163,476
  177,065
  191,197
  205,886
  221,152
  237,016
  253,503
  270,641
  288,460
  306,997
  326,286
  346,369
  367,288
  389,089
  411,819
  435,531
  460,277
  486,117
  513,108
  541,315
  570,803
Debt-to-equity ratio
  0.880
  0.920
  0.960
  0.990
  1.010
  1.030
  1.050
  1.070
  1.080
  1.090
  1.100
  1.110
  1.120
  1.130
  1.140
  1.140
  1.150
  1.150
  1.160
  1.160
  1.170
  1.170
  1.170
  1.180
  1.180
  1.180
  1.190
  1.190
  1.190
  1.190
Adjusted equity ratio
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448
  0.448

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,175
  2,915
  3,704
  4,539
  5,419
  6,343
  7,311
  8,322
  9,378
  10,478
  14,686
  15,877
  17,115
  18,401
  19,739
  21,129
  22,575
  24,079
  25,644
  27,274
  28,971
  30,740
  32,584
  34,507
  36,515
  38,611
  40,800
  43,088
  45,480
  47,982
Depreciation, amort., depletion, $m
  9,000
  9,650
  10,343
  11,075
  11,848
  12,660
  13,510
  14,399
  15,326
  16,292
  13,100
  14,146
  15,232
  16,362
  17,536
  18,755
  20,023
  21,342
  22,713
  24,140
  25,626
  27,174
  28,787
  30,468
  32,223
  34,053
  35,965
  37,962
  40,049
  42,231
Funds from operations, $m
  11,174
  12,565
  14,046
  15,614
  17,267
  19,002
  20,821
  22,721
  24,704
  26,770
  27,786
  30,022
  32,347
  34,763
  37,274
  39,885
  42,598
  45,421
  48,357
  51,414
  54,597
  57,913
  61,370
  64,975
  68,737
  72,664
  76,765
  81,050
  85,529
  90,213
Change in working capital, $m
  224
  240
  255
  270
  285
  300
  314
  328
  342
  357
  371
  386
  401
  417
  433
  450
  468
  487
  506
  527
  548
  571
  595
  621
  647
  676
  706
  737
  770
  805
Cash from operations, $m
  10,950
  12,325
  13,791
  15,344
  16,981
  18,703
  20,507
  22,393
  24,362
  26,413
  27,415
  29,637
  31,946
  34,346
  36,841
  39,434
  42,130
  44,934
  47,851
  50,887
  54,049
  57,342
  60,775
  64,355
  68,090
  71,988
  76,060
  80,313
  84,759
  89,407
Maintenance CAPEX, $m
  -4,195
  -4,802
  -5,453
  -6,145
  -6,878
  -7,651
  -8,462
  -9,313
  -10,201
  -11,129
  -12,095
  -13,100
  -14,146
  -15,232
  -16,362
  -17,536
  -18,755
  -20,023
  -21,342
  -22,713
  -24,140
  -25,626
  -27,174
  -28,787
  -30,468
  -32,223
  -34,053
  -35,965
  -37,962
  -40,049
New CAPEX, $m
  -6,074
  -6,507
  -6,922
  -7,328
  -7,726
  -8,117
  -8,503
  -8,888
  -9,273
  -9,660
  -10,054
  -10,455
  -10,868
  -11,294
  -11,737
  -12,198
  -12,679
  -13,184
  -13,714
  -14,271
  -14,858
  -15,477
  -16,129
  -16,817
  -17,543
  -18,309
  -19,117
  -19,969
  -20,868
  -21,816
Cash from investing activities, $m
  -10,269
  -11,309
  -12,375
  -13,473
  -14,604
  -15,768
  -16,965
  -18,201
  -19,474
  -20,789
  -22,149
  -23,555
  -25,014
  -26,526
  -28,099
  -29,734
  -31,434
  -33,207
  -35,056
  -36,984
  -38,998
  -41,103
  -43,303
  -45,604
  -48,011
  -50,532
  -53,170
  -55,934
  -58,830
  -61,865
Free cash flow, $m
  681
  1,016
  1,416
  1,870
  2,377
  2,935
  3,541
  4,193
  4,888
  5,624
  5,267
  6,081
  6,932
  7,819
  8,742
  9,701
  10,696
  11,727
  12,796
  13,903
  15,050
  16,239
  17,472
  18,751
  20,078
  21,457
  22,889
  24,379
  25,928
  27,542
Issuance/(repayment) of debt, $m
  4,573
  4,855
  5,165
  5,468
  5,764
  6,056
  6,344
  6,631
  6,918
  7,208
  7,501
  7,801
  8,109
  8,427
  8,757
  9,101
  9,460
  9,837
  10,232
  10,648
  11,086
  11,547
  12,034
  12,547
  13,089
  13,660
  14,263
  14,899
  15,570
  16,277
Issuance/(repurchase) of shares, $m
  1,491
  1,025
  488
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  6,064
  5,880
  5,653
  5,468
  5,764
  6,056
  6,344
  6,631
  6,918
  7,208
  7,501
  7,801
  8,109
  8,427
  8,757
  9,101
  9,460
  9,837
  10,232
  10,648
  11,086
  11,547
  12,034
  12,547
  13,089
  13,660
  14,263
  14,899
  15,570
  16,277
Total cash flow (excl. dividends), $m
  6,746
  6,896
  7,068
  7,338
  8,142
  8,991
  9,886
  10,824
  11,806
  12,832
  12,768
  13,882
  15,041
  16,246
  17,499
  18,802
  20,156
  21,564
  23,028
  24,551
  26,136
  27,787
  29,506
  31,298
  33,167
  35,117
  37,152
  39,278
  41,498
  43,819
Retained Cash Flow (-), $m
  -3,666
  -3,940
  -4,192
  -4,438
  -4,678
  -4,915
  -5,149
  -5,382
  -5,615
  -5,850
  -6,088
  -6,331
  -6,581
  -6,839
  -7,107
  -7,386
  -7,678
  -7,983
  -8,304
  -8,642
  -8,997
  -9,372
  -9,767
  -10,183
  -10,623
  -11,087
  -11,576
  -12,092
  -12,637
  -13,211
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  167
  192
  218
  245
  274
  305
  338
  372
  407
  444
  483
  523
  564
  608
  653
  700
  748
  799
  852
  906
  963
  1,022
  1,084
  1,149
  1,216
  1,286
  1,359
  1,435
  1,515
  1,598
Cash available for distribution, $m
  3,080
  2,956
  2,877
  2,900
  3,463
  4,076
  4,736
  5,442
  6,191
  6,982
  6,680
  7,551
  8,460
  9,407
  10,392
  11,416
  12,478
  13,580
  14,723
  15,909
  17,139
  18,415
  19,739
  21,115
  22,544
  24,030
  25,576
  27,186
  28,862
  30,609
Discount rate, %
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
  2,873
  2,555
  2,287
  2,105
  2,277
  2,405
  2,486
  2,515
  2,493
  2,422
  1,972
  1,874
  1,741
  1,583
  1,408
  1,225
  1,043
  869
  707
  562
  436
  330
  243
  175
  122
  83
  54
  35
  21
  13
Current shareholders' claim on cash, %
  98.4
  97.4
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0
  97.0

Thermo Fisher Scientific Inc. develops, manufactures and sells a range of products. The Company provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It operates through four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. The Life Sciences Solutions segment provides a portfolio of reagents, instruments and consumables. The Analytical Instruments segment provides a range of instruments, consumables, software and services. The Specialty Diagnostics segment offers a range of diagnostic test kits, reagents, culture media, instruments and associated products. The Laboratory Products and Services segment offers controlled temperature technologies products, growth protection and separation products, and water and laboratory products.

FINANCIAL RATIOS  of  Thermo Fisher Scientific (TMO)

Valuation Ratios
P/E Ratio 45.1
Price to Sales 5
Price to Book 4.2
Price to Tangible Book
Price to Cash Flow 28.9
Price to Free Cash Flow 33.6
Growth Rates
Sales Growth Rate 7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5%
Cap. Spend. - 3 Yr. Gr. Rate 9.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 71.4%
Total Debt to Equity 77.2%
Interest Coverage 5
Management Effectiveness
Return On Assets 5.7%
Ret/ On Assets - 3 Yr. Avg. 5.9%
Return On Total Capital 5.6%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 9.4%
Return On Equity - 3 Yr. Avg. 9.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 45.8%
Gross Margin - 3 Yr. Avg. 45.3%
EBITDA Margin 23.2%
EBITDA Margin - 3 Yr. Avg. 24%
Operating Margin 13.4%
Oper. Margin - 3 Yr. Avg. 14%
Pre-Tax Margin 11.1%
Pre-Tax Margin - 3 Yr. Avg. 11.6%
Net Profit Margin 11.1%
Net Profit Margin - 3 Yr. Avg. 11.3%
Effective Tax Rate -0%
Eff/ Tax Rate - 3 Yr. Avg. 2.3%
Payout Ratio 11.8%

TMO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TMO stock intrinsic value calculation we used $20918 million for the last fiscal year's total revenue generated by Thermo Fisher Scientific. The default revenue input number comes from 2017 income statement of Thermo Fisher Scientific. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TMO stock valuation model: a) initial revenue growth rate of 14.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.2%, whose default value for TMO is calculated based on our internal credit rating of Thermo Fisher Scientific, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Thermo Fisher Scientific.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TMO stock the variable cost ratio is equal to 80.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1164 million in the base year in the intrinsic value calculation for TMO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Thermo Fisher Scientific.

Corporate tax rate of 27% is the nominal tax rate for Thermo Fisher Scientific. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TMO stock is equal to 0.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TMO are equal to 200.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Thermo Fisher Scientific operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TMO is equal to 7.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $25413 million for Thermo Fisher Scientific - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 395 million for Thermo Fisher Scientific is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Thermo Fisher Scientific at the current share price and the inputted number of shares is $91.5 billion.

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COMPANY NEWS

▶ 4 Nanotech Stocks to Watch for Explosive Innovation   [Aug-08-18 03:01PM  InvestorPlace]
▶ Thermo Fisher: 2Q Earnings Snapshot   [06:13AM  Associated Press]
▶ Thermo Fisher Scientific's Q2 Earnings Preview   [Jul-24-18 03:21PM  Benzinga]
▶ Mass. firms ban once-common question: How much do you make?   [Jul-16-18 02:48PM  American City Business Journals]
▶ Thermo Fisher Scientific Declares Quarterly Dividend   [Jul-13-18 08:00AM  PR Newswire]
▶ Medical Device ETFs Still Look Healthy   [Jun-29-18 10:48AM  ETF Trends]
▶ Sarasota tech firm sells software unit for $925M   [06:38AM  American City Business Journals]
▶ Healthcare Heavyweights Weigh M&A After GE Spin-off - ICYMI   [Jun-26-18 08:02PM  TheStreet.com]
▶ Conquering cancer in the Windy City   [Jun-01-18 04:40PM  CNBC Videos]
▶ How a Greek immigrant started multinational giant Thermo Fisher   [May-31-18 11:00AM  American City Business Journals]
▶ [$$] Lawmakers Say U.S. Tech Is Being Used in Abusive Chinese Crackdowns   [May-16-18 10:57AM  The Wall Street Journal]
▶ Durhams Phononic signs exclusive deal with Thermo Fisher   [May-03-18 08:07AM  American City Business Journals]
▶ Thermo Fisher Scientific to Host Analyst Meeting   [Apr-30-18 04:05PM  PR Newswire]
▶ Thermo Fisher: 1Q Earnings Snapshot   [06:11AM  Associated Press]
▶ Lawsuit claims Thermo Fisher discriminated against ex-Marine with PTSD   [Apr-12-18 05:52AM  American City Business Journals]
▶ The 10 Best Stocks to Buy for April   [Apr-03-18 01:17PM  InvestorPlace]
▶ [$$] Thermo Fisher Scientific Acquires IntegenX   [01:19PM  The Wall Street Journal]
▶ Thermo Fisher tops Street 4Q forecasts   [06:21AM  Associated Press]
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