Investment Thesis
Revvity exhibits concerning profitability deterioration with net income declining 10.8% YoY despite modest 3.7% revenue growth, indicating significant margin compression. Abysmal returns on equity (0.6%) and assets (0.3%) reveal poor capital efficiency, while weak interest coverage of 1.5x and elevated leverage present financial risk despite positive cash flow generation.
Strengths
- Positive free cash flow generation of $95.5M with healthy 13.4% FCF margin
- Adequate liquidity with 1.72x current ratio and $860.3M cash position
- Manageable debt-to-equity ratio of 0.37x relative to total capitalization
Risks
- Deteriorating profitability: net income down 10.8% YoY despite revenue growth signals margin compression and operational underperformance
- Extremely low returns on capital (ROE 0.6%, ROA 0.3%) indicate severe underutilization of $12B asset base
- Weak interest coverage ratio of 1.5x leaves limited cushion for debt service if operations weaken further
- Anemic revenue growth of 3.7% YoY suggests mature stagnant business with limited expansion potential
Key Metrics to Watch
- Net income trajectory and operating margin trends in subsequent quarters
- Interest coverage ratio sustainability given declining profitability
- Free cash flow consistency and capital allocation decisions to support equity returns
Financial Metrics
Revenue
711.1M
Net Income
40.7M
EPS (Diluted)
$0.36
Free Cash Flow
95.5M
Total Assets
12.0B
Cash
860.3M
Profitability Ratios
Gross Margin
279.8%
Operating Margin
10.7%
Net Margin
5.7%
ROE
0.6%
ROA
0.3%
FCF Margin
13.4%
Balance Sheet & Liquidity
Current Ratio
1.72x
Quick Ratio
1.41x
Debt/Equity
0.37x
Debt/Assets
40.1%
Interest Coverage
1.55x
Long-term Debt
2.6B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-13T07:03:20.468566 |
Data as of: 2026-04-05 |
Powered by Claude AI