Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 9.2 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 7.1 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.6x
- ▸PEG: 0.23
AVTR · Why this verdict
Why Avantor (AVTR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Avantor is a steady earnings-beater with strong cash conversion (131% FCF/NI) and a forward P/E of 18.1x, but quality is below average and the price of $16.05 is 6.0% above the $15.09 analyst target. Weak momentum and a negative reward-to-risk leave little room for new capital.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Cash conversion is excellent at 131% FCF/NI with a Piotroski score of 9/9, even though returns and margins are modest. Quality breakdown | Free cash flow should stay above net income, funding debt paydown. | ↑Improving |
| CounterNo competitive moat and a ROE score of 2.0/10 mean cash strength may not translate into shareholder returns. | ||
Avantor has beaten EPS estimates in 3 of the last 4 quarters with none missed, and an average surprise of 6.6%. Earnings track record | EPS should keep meeting or beating estimates through the next 4 reports, the next due 2027-02-10. | ↑Improving |
| CounterBeats are small (1.5% to 11%) on low per-share figures, and the stock already trades above the analyst target so little is left to gain from them. | ||
The price of $16.05 is 6.0% above the $15.09 analyst target, with 6.8% downside to the stop, giving a negative reward-to-risk of -0.88. Estimated upside | Analyst targets should be revised up toward the price, or the price should drift back toward the target. | ↑Improving |
| CounterAnalysts may be slow to update; consistent beats and the healthcare tailwind could justify higher targets. | ||
Momentum is weak at 3.6/10 with falling on-balance volume and a range-bound chart (RSI 58), despite price staying above its 200-day average. Momentum breakdown | Momentum should rise above 4.5 with volume turning to accumulation. | ↓Deteriorating |
| CounterPrice remains above the 200-day average and near its 52-week high, so a pullback may be a pause rather than a trend break. | ||
The company relies on sole-sourced raw materials, a high-severity concentration risk, and the put/call ratio is elevated at 2.98. Bear case | Supply should stay uninterrupted and put/call should ease below 1.5. | →Stable |
| CounterSole-sourcing for a scaled distributor is commonly covered by long contracts and inventory, and elevated put volume may be hedging rather than bearish conviction. | ||
Cash conversion is excellent at 131% FCF/NI with a Piotroski score of 9/9, even though returns and margins are modest.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow should stay above net income, funding debt paydown.
CounterNo competitive moat and a ROE score of 2.0/10 mean cash strength may not translate into shareholder returns.
Avantor has beaten EPS estimates in 3 of the last 4 quarters with none missed, and an average surprise of 6.6%.
↑ImprovingEarnings track record
- Expectation
- EPS should keep meeting or beating estimates through the next 4 reports, the next due 2027-02-10.
CounterBeats are small (1.5% to 11%) on low per-share figures, and the stock already trades above the analyst target so little is left to gain from them.
The price of $16.05 is 6.0% above the $15.09 analyst target, with 6.8% downside to the stop, giving a negative reward-to-risk of -0.88.
↑ImprovingEstimated upside
- Expectation
- Analyst targets should be revised up toward the price, or the price should drift back toward the target.
CounterAnalysts may be slow to update; consistent beats and the healthcare tailwind could justify higher targets.
Momentum is weak at 3.6/10 with falling on-balance volume and a range-bound chart (RSI 58), despite price staying above its 200-day average.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum should rise above 4.5 with volume turning to accumulation.
CounterPrice remains above the 200-day average and near its 52-week high, so a pullback may be a pause rather than a trend break.
The company relies on sole-sourced raw materials, a high-severity concentration risk, and the put/call ratio is elevated at 2.98.
→StableBear case
- Expectation
- Supply should stay uninterrupted and put/call should ease below 1.5.
CounterSole-sourcing for a scaled distributor is commonly covered by long contracts and inventory, and elevated put volume may be hedging rather than bearish conviction.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.0 |
| ROA | 1.9 |
| Gross margin | 2.3 |
| Op margin | 3.3 |
| Net margin | 2.5 |
| Current ratio | 6.7 |
| FCF quality | 9.4 |
| Moat | 4.5 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 131% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 10.0 |
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.4 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 2.1 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 5.0 |
| Price target | 6.6 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.4 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 5.7 |
| growth rank | 1.8 |
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.4 |
| support resistance | 7.5 |
| 52w position | 7.9 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.9 |
| days to cover | 6.6 |
| volatility | 3.5 |
| put call | 0.0 |
| implied vol | 3.6 |
| max pain risk | 3.0 |
| beta | 7.3 |
| debt equity | 7.2 |
| news risk | 3.0 |
- ▸Elevated put/call: 53.40
- ▸Above max pain $8
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:98d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-0.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.44
Upside
-3.2%
Downside
7.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.0<4.5, ASYMMETRY:-0.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.44 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 7.6, Growth at 6.8, and Catalyst at 6.8; the weakest are Momentum at 3.0, Peer rank at 4.3, and Risk (lower is worse) at 4.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.44 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Steady Earnings Beat Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Strong Cash Conversion
Trip ifFree cash flow to net income conversion falls below 80% from current 131%.
- P3Price Above Analyst Target
Trip ifPrice stays more than 10% above the analyst target from current 6.0% above.
- P4Weak Momentum Range Bound
Trip ifMomentum score exceeds 5.5 from current 3.6.
- P5Sole Source Supply Risk
Trip ifPut/call ratio exceeds 4.0 from current 2.98.