BIO

Bio-Rad screens optically cheap at a 10.1x P/E on FY2025 diluted EPS of $27.85, and the balance sheet is fortress-grade: $7.45B of equity against just $3.12B of total liabilities (0.42x liabilities/equity), $530M of cash, and $1.20B of long-term debt that barely moved year over year. Net income swung to $760M (+141.2%) and the company keeps returning capital, with share buybacks rising to $296M. On the surface this is a high-quality, well-capitalized franchise trading at a single-digit earnings multiple.

The problem is that the headline earnings quality is misleading. Operating income was only $47.2M (-82.5% YoY) on $2.58B of revenue, an operating margin of just 1.8%, while net margin of 29.4% and the 141% EPS jump are driven by below-the-line items (the equity-holdings mark that has whipsawed net income from +$4.25B in 2021 to losses of -$3.63B, -$637M and -$1.84B in 2022-2024). Strip that out and the core instruments business is barely profitable. Revenue has gone backward for years -- $2.92B in 2021 to $2.58B in 2025 -- and grew only +0.7% in FY2025, with gross profit down 2.8% and gross margin at 51.9%.