Thermo Fisher Scientific Inc. (TMO): A Bull Case Theory

We came across a bullish thesis on Thermo Fisher Scientific Inc. (TMO) on D Invests’ Substack. In this article, we will summarize the bulls’ thesis on TMO. Thermo Fisher Scientific Inc. (TMO)’s share was trading at $408.53 as of 9^th June. TMO’s trailing and forward P/E were 23.96 and 18.21 respectively according to Yahoo Finance.

Thermo Fisher Scientific (TMO) has endured a brutal 2025, with shares falling 35% year-to-date, making it one of the S&P 500’s worst performers. This sharp correction stems from industry-wide headwinds—namely, a global biopharma spending pullback, tariff impacts, and a drop in U.S. government and academic funding under the Trump administration. These are macro-driven issues, not fundamental company flaws.

Despite this, Thermo Fisher remains a long-term compounder, bolstered by its scale, operational breadth, and resilient high-margin recurring revenues, which account for 83% of sales. At its core, TMO is a dominant provider of instruments, diagnostics, bioproduction solutions, and outsourced clinical and manufacturing services.

Its four business segments—Life Science Solutions, Analytical Instruments, Specialty Diagnostics, and Lab Products & Biopharma Services—each hold leadership positions in their markets. The company is uniquely positioned to benefit from industry tailwinds such as an aging population, complex biologic drug pipelines, and stricter regulatory requirements.

Particularly, its bioproduction and CDMO/CRO units (via Patheon and PPD) are crucial infrastructure for biotech and pharma clients. The breadth of its offerings enables a flywheel effect: as customers adopt Thermo’s platforms, ongoing consumables usage drives predictable revenues. This “razor-and-blade” model creates stickiness and pricing power. Importantly, TMO’s scale allows it to be a one-stop shop across research, diagnostics, and clinical manufacturing, offering unmatched convenience.

While the recent stock price collapse is painful, it has also created an opportunity to buy a global leader at a compelling valuation. As industry conditions stabilize, Thermo Fisher’s entrenched market position, operational resilience, and structural growth drivers should reassert themselves, making this an attractive long-term investment.

Previously, we covered a bullish thesis on Thermo Fisher Scientific from FluentInQuality on Substack, which framed TMO as a high-quality compounder with strong recurring revenue streams, robust capital efficiency, and a central role in enabling scientific and medical breakthroughs. With gross margins above 40%, consistent FCF generation, and a five-year revenue CAGR of nearly 11%, the thesis emphasized Thermo’s durability and long-term value creation potential. The stock has lost by 21% since then.

Thermo Fisher Scientific Inc. (TMO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held TMO at the end of the first quarter which was 100 in the previous quarter. While we acknowledge the risk and potential of TMO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.