Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 2 Jun 2026
TMO· Healthcare
Thermo Fisher Scientific
Thermo Fisher is a fine laboratory toll-booth priced like a great one, with the market paying 26 times earnings for a business earning just 7.3 percent on capital.
Buffett fit
Partial fit
Owner
33
Durability
66
Management
53
Price
25
Score updated 29 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Thermo Fisher, I would ask what my capital is actually earning, and the answer is sobering.
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The durability here is real but ordinary. Customers do reorder consumables and instruments, which gives some , and the current ratio of 1.53 means the bills get paid.
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Management converts 93 cents of every reported dollar of profit into real cash, which I respect, and they have nudged the share count down about 1.2 percent a year.
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There is no here, and I will not pretend otherwise. At 26.4 times earnings the owner-earnings yield is just 3.48 percent, less than a Treasury bill, for a business growing in the low single digits and shrinking on a per-share basis.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Cash earnings are genuine, with at 93.4 percent of reported net income, so the profits are not an accounting illusion.
- 2Real switching costs exist as labs standardize on installed instruments and reorder matched consumables, supporting the 39.4 percent .
- 3A 17.8 percent shows the business keeps a solid cut of every dollar of sales.
- 4The share count has been reduced about 1.2 percent a year, so management returns some capital rather than only diluting owners.
Concerns
6- 1The price is the problem first and foremost, at 26.4 times earnings and an owner-earnings yield of only 3.48 percent, below a risk-free Treasury, with EV to at 27.2.
- 2 is just 7.3 percent trailing and 8.1 percent over five years, far too low to justify a premium multiple.
- 3Earnings per share have actually shrunk at 2.4 percent a year, the opposite of the I want to pay up for.
- 4Revenue is barely moving, at only 3.2 percent, so growth will not bail out the rich valuation.
Price history
$704+11.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Thermo Fisher sells the instruments, reagents, consumables and lab services that drug makers, hospitals and academic labs cannot run without, and a large slice of that revenue recurs as customers reorder supplies year after year. The economics are decent but not extraordinary, a 39.4 percent and a 17.8 percent , which tells you they take a real cut but face plenty of competition. The trouble is that growth has stalled, with revenue at only 3.2 percent and earnings per share actually shrinking 2.4 percent a year.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Healthcare
Questions about Thermo Fisher Scientific
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