Azenta Stock To $25?

Azenta (AZTA) stock has jumped 16% during the past day, and is currently trading at $34.89. Our multi-factor assessment suggests that it may be time to sell AZTA stock. We have, overall, a pessimistic view of the stock, and a price of $25 may not be out of reach. We believe there are a few things to fear in AZTA stock given its overall Weak operating performance and financial condition. In addition, keeping in mind its High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $1.6 Bil in market cap, Azenta provides manufacturing automation solutions and automated ultra-cold storage systems with consumables for the semiconductor and life sciences industries.

[1] Valuation Looks High

This table highlights how AZTA is valued vs broader market. For more details see: AZTA Valuation Ratios

[2] Growth Is Inconsistent

• Azenta has seen its top line grow at an average rate of 6.8% over the last 3 years
• Its revenues have grown 12% from $595 Mil to $669 Mil in the last 12 months
• Also, its quarterly revenues declined -0.2% to $144 Mil in the most recent quarter from $144 Mil a year ago.

This table highlights how AZTA is growing vs broader market. For more details see: AZTA Revenue Comparison

[3] Profitability Appears Very Weak

• AZTA last 12 month operating income was $-59 Mil representing operating margin of -8.9%
• With cash flow margin of 13.2%, it generated nearly $88 Mil in operating cash flow over this period
• For the same period, AZTA generated nearly $-112 Mil in net income, suggesting net margin of about -16.7%

This table highlights how AZTA profitability vs broader market. For more details see: AZTA Operating Income Comparison

[4] Financial Stability Looks Very Strong

• AZTA Debt was $53 Mil at the end of the most recent quarter, while its current Market Cap is $1.6 Bil. This implies Debt-to-Equity Ratio of 3.3%
• AZTA Cash (including cash equivalents) makes up $319 Mil of $2.0 Bil in total Assets. This yields a Cash-to-Assets Ratio of 15.8%

[5] Downturn Resilience Is Weak

AZTA has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• AZTA stock fell 70.6% from a high of $124.15 on 8 November 2021 to $36.45 on 10 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $67.51 on 29 January 2024 , and currently trades at $34.89

 
2020 Covid Pandemic

• AZTA stock fell 48.6% from a high of $44.14 on 16 January 2020 to $22.69 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 30 June 2020

 
2008 Global Financial Crisis

• AZTA stock fell 87.1% from a high of $19.96 on 19 July 2007 to $2.58 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 2 February 2017

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read AZTA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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