Agilent benefits from increasing pharmaceutical R&D spending, growing demand for personalized medicine, and expanding environmental testing requirements. The Biovectra acquisition strategically positions the firm in the rapidly expanding CDMO (Contract Development and Manufacturing Organization) market, particularly in next-generation therapeutics like gene-editing and cell therapies.
With revenue growth accelerating for four consecutive quarters and strong performance in key markets including China, this testing giant demonstrates robust operational execution despite challenging market conditions.
Meanwhile, the stock trades at 21.3 times Agilent’s forward earnings forecast. That’s a reasonable multiple supported by the company’s robust revenue growth and strategic expansion into high-potential markets which should fuel accelerating earnings over the years to come.
AGILENT TECHNOLOGIES INC. (New York symbol A; www.agilent.com) makes specialized testing equipment, including liquid and gas chromatography systems, mass spectrometers, and atomic absorption instruments, for medical research laboratories and industrial clients.
In September 2024, Agilent completed the acquisition of Biovectra Inc. Based in Charlottetown, PEI, this firm makes drugs on behalf of over 100 pharmaceutical and biotech clients. The company paid $925 million for this business.
Biovectra adds $113 million to Agilent’s annual revenue of $6.6 billion. However, the acquisition will cut its earnings in the first year by $0.05 a share. Even so, Biovectra’s expertise will let Agilent’s Diagnostics and Genomics division offer its clients a wider variety of services, particularly in fast-growing areas like gene-editing.
Growth Stocks: Steady earnings growth underscores a strong commitment to R&D
In the fiscal 2025 second quarter, ended April 30, 2025, revenue rose 6.0%, to $1.67 billion from $1.57 billion a year earlier. That topped the consensus forecast of $1.63 billion.
The higher revenue also lifted earnings before unusual items by 4.8%, to $373 million from $356 million. The company repurchased $165 million of its shares in the quarter, which is why per-share earnings improved 7.4%, to $1.31 from $1.22. That topped the consensus estimate of $1.16.
Agilent is now streamlining its businesses to improve its long-term profitability. The plan should cut its annual costs by $130 million in fiscal 2025, which will help it cope with tariffs.
For all of fiscal 2025, the company’s earnings will likely rise about 6% to $5.58 a share, and the stock at 21.3 times that estimate. That’s a reasonable multiple as the company is a leader in its niche market and spends a high 7% of its revenue on research.
The $0.992 dividend yields 0.8%.
Recommendation in Wall Street Stock Forecaster: Agilent Technologies Inc. is a buy.
