Is Bio-Rad Laboratories Inc. (BIO) an Undervalued Stock?

BIO Stock
BIO Stock

The markets sometimes become cruel, as the companies which have got an excellent portfolio on the development side depict unimpressive performance on the financial front. The same goes for Bio-Rad Laboratories Inc. (NYSE: BIO). The company has a market capitalization of $16.28 billion and a trading volume of 140,187 and is a leader in the development and marketing of a broad range of products utilized in life sciences research. The company has, over the years, supplied in-demand products to the market, resulting in the eradication of some of the world’s biggest health-related threats. However, the outstanding performance on the development side hasn’t been able to traverse to the financial side of the company, making it an unimpressive choice for the investors.

Recent Developments for BIO

To bring an improvement in its financial stature, BIO has taken several steps during the last few months. Recently, the company announced that it would be closing its underwritten public offering of $1.2 billion of the notes. They include a $400 million aggregate amount which is due in 2027, while an $800 million aggregate amount is due in 2032. The five-year notes have an annual interest rate of 3.3%, while the ten-year notes have an annual interest rate of 3.7%. The company said that it would use the net proceeds from the offering for corporate purposes.

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Deftly Managing Debt

The last several years have seen BIO skillfully managing its debt-related issues. This is evident from the fact that the company has been able to reduce the outstanding debt by $211.6 million since the start of 2018 before the issuance of $1.2 billion in terms of bonds during the same year. With the debt burden reduced, the company has set its eyes on organic growth and acquisitions. That is an outstanding equation given the fact that the company hasn’t been able to spend properly in this regard for the last few years.

Final Remarks

At the moment, BIO stock doesn’t seem to be a stock worth investing in for the investors. The P/E ratio of 3.81 is the epitome of that. However, analysts believe that the earnings per share for BIO stock is expected to rise during the upcoming few months. This means that investment at the current time could provide investors with hefty returns going forward.


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