Thermo Fisher Scientific

Methodology

Thermo Fisher's fair value calculation works well given the company's consistent earnings growth driven by consumables revenue, life sciences exposure, and strategic acquisitions. The method captures Thermo's position as a high-quality compounder with predictable demand from pharmaceutical and biotech customers. Fair value estimates are reliable because the business model emphasizes recurring revenue and operates across diversified end markets that smooth cyclical volatility.

Methodology

Thermo Fisher typically commands premium PEG ratios reflecting its position as a best-in-class life sciences tools provider with secular growth drivers in biopharma R&D and precision medicine. The PEG framework works well because growth rates are steady and supported by recurring consumables revenue, though investors should normalize for occasional surges from pandemic-related demand or large acquisitions. Comparing Thermo's PEG to Danaher and other diversified life sciences peers provides context for relative valuation.

Methodology

Thermo Fisher pays a minimal dividend as management prioritizes reinvesting in R&D and strategic acquisitions to drive growth, so PEGY essentially equals PEG with negligible yield impact. The capital allocation strategy focuses on compounding through acquisitions and organic investment rather than returning cash to shareholders. For Thermo investors, growth and return on invested capital matter far more than dividend yield, making standard PEG more relevant than PEGY.