Thermo Fisher Scientific Inc. (NYSE:TMO)

Price to Earnings (P/E) Ratio

The P/E ratio demonstrated an overall increasing trend from 27.89 in 2020 to a peak of 35.65 in 2023, followed by a slight decline to 32.03 in 2024. This pattern indicates a growing market expectation of future earnings up to 2023, with a modest adjustment downward in the most recent year, suggesting some normalization or recalibration of earnings expectations.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio follows a similar trajectory to the P/E ratio, decreasing from 22.81 in 2020 to 21.07 in 2021, then rising sharply to 31.16 in 2023 before decreasing to 27.65 in 2024. This fluctuation reflects changes in market valuation relative to operating profitability, with investors initially cautious, then becoming more optimistic, and finally moderating their valuation in the last year.

Price to Sales (P/S) Ratio

The P/S ratio shows a gradual decline from 5.52 in 2020 to 4.73 in 2022, followed by a brief increase to 4.99 in 2023, and returning to 4.73 in 2024. This downward movement could indicate a relative compression in sales valuation multiples, possibly reflecting slower revenue growth or shifts in market sentiment regarding sales quality or growth potential.

Price to Book Value (P/BV) Ratio

The P/BV ratio consistently declined from 5.15 in 2020 to 4.09 in 2024, indicating a steady decrease in market valuation relative to book value over the period. This trend may suggest increased caution by investors concerning the company’s net asset value or a relative increase in book value not matched by market price growth.

The analysis of the financial data over the period from December 31, 2020, to December 31, 2024, reveals several notable trends in share price, earnings per share (EPS), and the price-to-earnings (P/E) ratio.

Share Price

The share price shows an upward trend from 451.47 US$ in 2020 to a peak of 560.49 US$ in 2023, indicating a strong increase in market value over these four years. However, in 2024, the share price decreased slightly to 537.83 US$, representing a modest decline from the previous year's peak but still above the 2020 baseline level.

Earnings per Share (EPS)

The EPS demonstrates growth from 16.19 US$ in 2020 to a peak of 19.75 US$ in 2021, followed by a decline to 18.03 US$ in 2022 and a more pronounced decrease to 15.72 US$ in 2023. In 2024, there is a slight recovery with EPS rising to 16.79 US$, though it remains below the levels seen in 2020 and 2021. This pattern indicates fluctuating profitability, with a peak in 2021 and a downturn afterward, which partially reverses in the latest period.

Price-to-Earnings (P/E) Ratio

The P/E ratio moves from 27.89 in 2020 to 27.35 in 2021, showing a marginal decline despite the EPS peak. Subsequently, it increases significantly to 30.55 in 2022 and reaches its highest level at 35.65 in 2023. In 2024, the P/E ratio decreases to 32.03 but remains elevated relative to the earlier years. This increasing trend in the P/E ratio during periods of declining EPS suggests that the market may have maintained high expectations for future earnings growth, or the share price held relatively firm despite reduced earnings.

Overall, the data reflects a share price generally trending upwards with a peak in 2023, while earnings per share peak earlier in 2021 and then decline before a partial recovery. The rising P/E ratio through 2023 indicates growing market valuation per unit of earnings, which moderates slightly in 2024 but stays high relative to the start of the observation period. This combination may illustrate investor optimism or other factors sustaining share price levels despite fluctuations in earnings.

Share Price

The share price exhibited an increasing trend from 451.47 US$ in 2020 to a peak of 560.49 US$ in 2023, representing steady growth over the four years. However, in 2024, there was a slight decline to 537.83 US$, indicating a modest decrease after the previous upward momentum.

Operating Profit Per Share

Operating profit per share increased from 19.79 US$ in 2020 to 25.63 US$ in 2021, which marked a significant improvement in profitability. Yet, from 2021 onward, there was a decline, reaching a low of 17.99 US$ in 2023. In 2024, this metric improved slightly to 19.45 US$, though it remained below the peak observed in 2021.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio showed a declining trend from 22.81 in 2020 to 21.07 in 2021, reflecting improved valuation relative to operating profit. After 2021, the ratio increased substantially, peaking at 31.16 in 2023, and then decreasing to 27.65 in 2024. This suggests that the market valuation became more expensive relative to operating profit in 2022 and 2023, before partially correcting in 2024.

Summary of Trends

The data reveals initial growth in both share price and operating profit per share during the early part of the period, followed by a weakening in operating profit per share accompanied by fluctuating but generally elevated market valuation multiples. The share price growth stabilized and slightly reversed in the last year observed. The divergence between declining profit per share and elevated price multiples suggests that market expectations or other factors may have influenced the valuation independent of recent operating profit performance.

The financial data over the five-year period reveals several key trends and insights regarding market valuation and sales performance.

Share Price

The share price experienced a consistent upward trend from 2020 to 2023, rising from 451.47 US$ to a peak of 560.49 US$, indicating strong market confidence and growth expectations during this period. However, there was a modest decline in 2024 to 537.83 US$, which may suggest a slight market correction or changing investor sentiment.

Sales Per Share

Sales per share showed a substantial increase from 81.81 US$ in 2020 to 116.53 US$ in 2022, reflecting significant revenue growth. Although there was a small dip in 2023 to 112.39 US$, sales per share rebounded slightly to 113.66 US$ in 2024. Overall, the sales performance remains robust with minor fluctuations.

Price-to-Sales (P/S) Ratio

The P/S ratio decreased from 5.52 in 2020 to 4.73 in 2022, indicating that the market price grew at a slower rate than sales, suggesting improving valuation relative to revenue. The ratio showed some volatility thereafter, increasing to 4.99 in 2023 before falling back to 4.73 in 2024, which may reflect adjustments in either market price or sales expectations.

In summary, the data indicates a generally positive sales growth trajectory accompanied by a strong stock price performance until 2023. The slight decline in share price and stabilization of the P/S ratio in 2024 could suggest a period of market reassessment or moderation in growth forecasts. The company’s sales per share remain on a high plateau, supporting a valuation that, while somewhat variable, maintains a favorable ratio relative to sales.

Share price

The share price demonstrated a general upward trend from 2020 to 2023, increasing from $451.47 to $560.49. However, in 2024, a decline to $537.83 was observed, indicating a slight downward adjustment after consecutive years of growth.

Book value per share (BVPS)

BVPS consistently increased throughout the five-year period, rising from $87.63 in 2020 to $131.43 in 2024. This steady growth reflects an accumulation of equity or retained earnings, suggesting improving net asset value per share over time.

Price to Book Value Ratio (P/BV)

The P/BV ratio decreased progressively from 5.15 in 2020 to 4.09 in 2024. This decline implies that the share price grew at a slower rate compared to the book value per share, potentially pointing to a relative undervaluation or a market reassessment of the company’s value.