Revvity’s 14.9% return over the past six months has outpaced the S&P 500 by 5.6%, and its stock price has climbed to $112.79 per share. This performance may have investors wondering how to approach the situation.
Is there a buying opportunity in Revvity, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Revvity Will Underperform?
We’re happy investors have made money, but we’re swiping left on Revvity for now. Here are three reasons why RVTY doesn’t excite us, plus one stock we’d rather own.
1. Slow Organic Growth Suggests Waning Demand In Core Business
Investors interested in Research Tools & Consumables companies should track organic revenue in addition to reported revenue. This metric gives visibility into Revvity’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Revvity’s organic revenue averaged 2.9% year-on-year growth. This performance slightly lagged the sector and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. 
2. Shrinking Adjusted Operating Margin
Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.
Looking at the trend in its profitability, Revvity’s adjusted operating margin decreased by 6 percentage points over the last five years. Even though its historical margin was healthy, shareholders will want to see Revvity become more profitable in the future. Its adjusted operating margin for the trailing 12 months was 27%.
3. EPS Trending Down
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Sadly for Revvity, its EPS declined by 14.7% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.
Final Judgment
We see the value of companies making people healthier, but in the case of Revvity, we’re out. With its shares topping the market in recent months, the stock trades at 20.3× forward P/E (or $112.79 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We’d suggest looking at one of our top digital advertising picks.
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