• If you are wondering whether Avantor stock is now offering value after a tough run, this article walks you through what the current price could be telling you.
• The share price recently closed at US$9.15, with the stock rising 16.3% over the past week and 16.4% over the past month, despite being down 20.2% year to date and 29.8% over the last year.
• Those moves come after a period where investors have been reassessing companies with longer track records of share price declines. Avantor has seen a 54.0% decline over three years and a 70.2% decline over five years. That kind of history often prompts investors to revisit whether the current valuation still matches expectations.
• On Simply Wall St's value checks, Avantor scores a 5 out of 6. The rest of this article will break down how different valuation methods assess the stock, before finishing with one more way to think about what the market might be pricing in.

Approach 1: Avantor Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a stock could be worth by projecting the company’s future cash flows and then discounting them back to today’s dollars. It is essentially asking what a stream of future cash flows is worth right now.

For Avantor, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month free cash flow is about $433.2 million. Analyst-based and extrapolated projections point to free cash flow of $514.62 million in 2026, rising to a projected $745.05 million in 2035, with $679 million in 2030. Beyond the analyst horizon, Simply Wall St extrapolates the later years to extend the forecast period.

When these projected cash flows are discounted back and summed, the DCF model suggests an estimated intrinsic value of about $14.78 per share for Avantor. Compared with the recent share price of $9.15, the model implies the stock is trading at an estimated 38.1% discount, which points to Avantor appearing undervalued on this measure.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Avantor is undervalued by 38.1%. Track this in your watchlist or portfolio, or discover 46 more high quality undervalued stocks.

Approach 2: Avantor Price vs Sales

For companies where revenue is a key reference point, the P/S ratio can be a useful way to think about what you are paying for each dollar of sales, especially when earnings are not the main focus. It is often used alongside expectations for future growth and the level of business risk, since faster growth or lower perceived risk can justify a higher “normal” or “fair” P/S multiple.

Avantor currently trades on a P/S ratio of 0.95x. That compares with an average P/S of 3.83x for the Life Sciences industry and a peer group average around 4.54x. Simply Wall St’s Fair Ratio for Avantor is 2.58x. This Fair Ratio is a proprietary estimate of what the company’s P/S could be based on factors such as its earnings growth profile, profit margins, industry, market cap and specific risks.

Because the Fair Ratio is tailored to Avantor’s characteristics, it can be more informative than a simple comparison with broad industry or peer averages that may include very different business models or risk levels. On this measure, Avantor’s actual P/S of 0.95x is below the Fair Ratio of 2.58x, which points to the stock appearing undervalued using the sales multiple.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Avantor Narrative

Earlier it was mentioned that there is an even better way to understand valuation. On Simply Wall St's Community page you can use Narratives, where you attach your own story about Avantor to specific revenue, earnings and margin assumptions. You can then link that forecast to a Fair Value, and compare it with the current price to help decide whether to act. The platform updates your Narrative automatically when new earnings or news arrive and allows very different views to coexist, such as an optimistic Narrative that lines up with a higher Fair Value around US$16.47 and a more cautious one closer to US$8.00. Both are built from the same shared data but different expectations.

For Avantor however we will make it really easy for you with previews of two leading Avantor Narratives:

Fair value: US$9.92

Implied discount to this fair value at the recent US$9.15 share price: about 7.8%.

Revenue growth assumption: about 1.8% a year.

• Analysts describe moderate revenue growth and a move from current losses to earnings of US$603.4 million by about May 2029, with profit margins in the mid single digits.
• The narrative focuses on ongoing demand from pharma and biotech, product development, digital tools, and a multiyear cost program targeting US$400 million in run rate savings.
• Key risks include price pressure to win contracts, slower bioprocessing recovery, margin strain from costs and product mix, and leverage that could limit flexibility if conditions stay difficult.

Fair value: US$8.00

Implied premium to this fair value at the recent US$9.15 share price: about 14.4%.

Revenue growth assumption: about 1.0% a year.

• This narrative assumes slower revenue growth, pressure on margins into mid single digits, and an earnings base of US$457.5 million by about September 2028.
• Concerns center on automation and digital tools that may reduce demand for some consumables, higher input and compliance costs, and price concessions that could lock in lower profitability.
• It also notes potential offsets such as long term contracts, digital platforms, cost control efforts, and experienced leadership, but treats these as not fully compensating for the headwinds.

If you want to see how other investors frame these trade offs over the next few years, including different revenue, margin and P/E assumptions, you can review the full set of community views in See what the community is saying about Avantor.

Do you think there's more to the story for Avantor? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.