Avantor Stock Fair Value – AVANTOR Reports Fourth Quarter 2022 Earnings Results on February 3, 2023.
February 23, 2023
Earnings Overview
On February 3, 2023, AVANTOR ($NYSE:AVTR) released its financial results for the fourth quarter of FY 2022, which concluded on December 31, 2022. Revenue for the quarter totaled USD 141.7 million, exhibiting a year-over-year rise of 50.7%, whereas net income for the same period was USD 1795.0 million, reflecting a 5.9% decrease compared to the previous year.
Transcripts Simplified
For the quarter, reported revenue was $1.795 billion at the midpoint of guidance provided on our Q3 results call. Our core organic growth for the quarter was 2.7%, reflecting ongoing strength in our core business, partially offset by inventory destocking and fewer selling days. For the full year, reported revenue was approximately $7.5 billion and core organic growth was 6%. Adjusted gross profit for the quarter was 34.3% and 34.8% for the full year, an expansion of almost 90 basis points compared to 2021. Adjusted earnings per share came in at $0.32 for the quarter and $1.41 for the year.
Adjusted net income grew double digits for the year on a constant currency basis. Free cash flow of $172 million in Q4 and $710 million for the full year. Adjusted net leverage ended the year at 3.7 times adjusted EBITDA, down from 4.2 times at the start of the year.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Avantor. More…
| Total Revenues | Net Income | Net Margin |
| 7.51k | 662.3 | 9.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Avantor. More…
| Operations | Investing | Financing |
| 843.6 | -109.6 | -648.7 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Avantor. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 13.46k | 8.61k | 7.2 |
Key Ratios Snapshot
Some of the financial key ratios for Avantor are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 7.5% | 27.0% | 14.9% |
| FCF Margin | ROE | ROA |
| 9.5% | 14.8% | 5.2% |
Price History
The news came after the market opened and AVANTOR stock opened at $23.9 and closed at $23.0, a 7.4% drop from the previous closing price of 24.9. This marked the largest one-day decline in AVANTOR stock since October 2021. Investors have responded to the earnings report with hesitance, as AVANTOR failed to meet analysts’ expectations for its revenue and profits in the fourth quarter of 2022. This shortfall in performance has caused some to question whether AVANTOR is still a strong investment option, as the company continues to face challenges in the challenging economic climate. In addition to the earnings results, AVANTOR also provided guidance for its upcoming fiscal year. While AVANTOR did not provide specifics on exactly how it plans to increase its revenue and profits, it did state that it will be focusing on expanding its customer base and increasing its product offerings in the year ahead. Investors remain cautiously optimistic about AVANTOR’s future prospects, noting that the company has a strong track record of success and a strong management team in place.
However, they are also aware that it is still early days and that any significant changes in AVANTOR’s performance could have an impact on its stock price. Overall, while investors have reacted negatively to AVANTOR’s fourth quarter 2022 earnings report, they remain hopeful that the company will be able to regain investor confidence in the upcoming fiscal year. Live Quote…
Analysis – Avantor Stock Fair Value
At GoodWhale, we conducted a thorough analysis of AVANTOR‘s financials, and have determined that the fair value of an AVANTOR share is around $26.9. This figure was calculated using our proprietary Valuation Line which encompasses a variety of factors such as revenue growth, profitability and management capability. Currently, AVANTOR stock is trading at $23.0, which means that it is undervalued by 14.4%. This presents an attractive opportunity for investors to be able to purchase AVANTOR stock at a discounted price. More…
Peers
It has a wide range of products that it offers to its customers. The company has a strong market presence and is known for its quality products. It has a number of competitors, such as 5N Plus Inc, Swancor Advanced Materials Co Ltd, and Mitsui Chemicals Inc.
– 5N Plus Inc ($TSX:VNP)
Samsung Electronics Co., Ltd. engages in the manufacturing and selling of electronics and computer peripherals. The company offers digital TVs, monitors, printers, refrigerators, washing machines, and air conditioners. It also provides semiconductor and telecommunication products, and operates foundries that manufacture integrated circuits, including processors, memory chips, and image sensors. The company was founded on January 13, 1969 and is headquartered in Suwon, South Korea.
– Swancor Advanced Materials Co Ltd ($SHSE:688585)
Swancor Advanced Materials Co Ltd is a Taiwanese company that manufactures and sells advanced materials. The company has a market cap of 3.59B as of 2022 and a Return on Equity of 4.37%. Swancor Advanced Materials Co Ltd’s products are used in a variety of industries, including the automotive, aerospace, and electronics industries. The company’s products are known for their quality and durability.
– Mitsui Chemicals Inc ($TSE:4183)
Mitsui Chemicals is a Japanese company that produces and sells a wide variety of chemicals. It has a market capitalization of 536.92 billion as of 2022 and a return on equity of 12.55%. The company has a wide variety of products and services, including plastics, synthetic fibers, resins, adhesives, and electronic materials. It also has a wide variety of end markets, including automotive, construction, electronics, and healthcare. The company has a strong presence in Asia, particularly in China and Japan.
Summary
AVANTOR has seen a strong year-over-year increase in revenue with a total of USD 141.7 million reported in the fourth quarter of fiscal year 2022.
However, the stock price did take a hit the same day, with a decrease in reported net income of 5.9% year-over-year. Investors should analyze the company’s strategic initiatives and financial performance to determine if investing in AVANTOR is right for them. Factors to consider include market trends, potential market expansion, product line, and financial health.
Additionally, looking at market news, analyst ratings, competitors and industry trends can be beneficial as well. Ultimately, research and proper analysis can help investors make an informed decision on whether investing in AVANTOR is worthwhile.
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