We came across a bullish thesis on Thermo Fisher Scientific Inc. on Rijnberk InvestInsights’s Substack by Daan | InvestInsights. In this article, we will summarize the bulls’ thesis on TMO. Thermo Fisher Scientific Inc.’s share was trading at $607.08 as of January 13th. TMO’s trailing and forward P/E were 35.07 and 24.51 respectively according to Yahoo Finance.
Thermo Fisher Scientific Inc. provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the North America, Europe, Asia-Pacific, and internationally. TMO represents a compelling way to gain long-term exposure to healthcare and pharmaceutical innovation without bearing the binary risks inherent in drug development. Global healthcare demand is structurally resilient, driven by aging populations, rising chronic disease prevalence, and increasing healthcare spend in emerging markets.
At the same time, medicine is shifting toward greater complexity, with biologics, precision therapies, and specialized treatments raising technical, regulatory, and manufacturing requirements. As drug development becomes more complex and costly, value is increasingly accruing not to drug developers themselves, but to the infrastructure providers that enable innovation across the ecosystem. Thermo Fisher sits at the center of this shift, forming a de facto duopoly with Danaher and commanding roughly 15% of the global life sciences tools and services market, underpinned by decades of institutional trust.
Rather than being exposed to patent cliffs or demand volatility, Thermo Fisher embeds itself across the entire drug development lifecycle, from discovery through commercial manufacturing. Once its instruments are specified in regulated workflows, switching becomes impractical, reinforcing customer lock-in. Critically, most of the company’s economics come not from upfront equipment sales, but from recurring, high-margin consumables tied to its installed base, turning each instrument into a multi-year annuity. This model allows Thermo Fisher to benefit from “more science” regardless of which therapies succeed.
Operationally, recent results highlight improving fundamentals. The company delivered a strong beat-and-raise quarter as COVID-related revenue headwinds faded, organic growth turned positive, and demand in pharma and biotech accelerated. Disciplined M&A remains a core value driver, expanding capabilities, strengthening moats, and enhancing end-to-end coverage, while robust free cash flow supports shareholder returns despite a leveraged balance sheet.
With durable pricing power, regulatory-reinforced moats, and visibility into sustained high-single-digit revenue growth and mid-teens earnings compounding, Thermo Fisher stands out as a rare, buy-and-hold compounder positioned to quietly benefit from the inevitable growth and rising complexity of global healthcare.
Previously, we covered a bullish thesis on Thermo Fisher Scientific Inc. (TMO) by Kontra in October 2024, which highlighted the company’s positioning as a quality compounder with durable long-term growth and scale advantages in life sciences tools. TMO’s stock price has been flat since our coverage. This is because near-term growth concerns and valuation sensitivity weighed on sentiment despite intact fundamentals. Daan | InvestInsights shares a similar view but emphasizes structural complexity in drug development and recurring consumables.
Thermo Fisher Scientific Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 121 hedge fund portfolios held TMO at the end of the third quarter which was 117 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 doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TMO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW
Disclosure: None.
