Azenta, Inc. (AZTA) stock intrinsic value fair value estimate & owner earnings analysis

Azenta, Inc. is a life-sciences company built around two things: safely storing biological samples for years or decades (its Sample Management Solutions business - freezers, robotics and biorepositories used by biobanks, hospitals and pharmaceutical companies) and genomic sequencing and related lab services (its Multiomics business, built substantially around the GENEWIZ brand). The company you see today is a recent creation: in February 2022 it sold its original semiconductor-automation equipment business (the reason it used to be called Brooks Automation) for roughly $3 billion, and used a large share of the proceeds to buy back stock, cutting its share count by more than a third since then. In late 2024 it also announced the sale of B Medical Systems, a medical-refrigeration equipment maker it had owned since 2021; that sale is still being finalized. Because of these two moves, this valuation is based on the business as it exists once both are complete: Sample Management Solutions and Multiomics only. On that basis, the underlying cash-generating power of the company has been climbing steadily - roughly $13 million in fiscal 2023, $21 million in fiscal 2024, and $26 million in fiscal 2025, on a diluted share count that has also been shrinking from buybacks. Revenue grew about 4% in each of the last two years and gross margin improved from about 43% to about 46% as the smaller, more efficient life-sciences business scales. We used the middle of these three years - fiscal 2024 - as the anchor level for a normal year, since three years is a short but clean window following the 2022 transformation, and then built the ten-year outlook forward from the demonstrated trend rather than freezing at that level. We also accounted for the fact that some of Azenta's earnings come from amortizing customer relationships and technology acquired mainly in the 2020 GENEWIZ deal, which will substantially run off over the next five years; rather than treat that as a permanent feature, we built its decline into a moderating growth path. Looking further out, the storage business is the more durable of the two: once a customer's samples are in a facility, moving them is risky and expensive, so these relationships tend to renew almost automatically for many years - closer to a specialized storage utility than a typical services business. Multiomics is more competitive and more exposed to the ups and downs of biopharma research funding. We assumed the storage business keeps growing modestly indefinitely, while the genomics side settles into a flatter, no-growth path once its current growth phase matures; blended, that supports a small (roughly 1.5% a year) sustained growth rate beyond year ten. Because that long-run value is discounted at a modest rate (a long-term government bond yield plus a small margin - the same rate we use for every company we analyze), it ends up being the majority of the total value calculated here. That's typical for a long-lived, capital-light business like this one, but worth stating plainly: most of what you'd be paying for is the durability of the storage relationships holding up for a decade or more, not the next few years of earnings. Our base case assumes revenue and margins keep improving at a healthy but gradually moderating pace, and works out to roughly $13.38 of value per share. Our bear case (roughly a one-in-ten outcome) assumes the recent biopharma research-funding downturn continues for longer, a major storage or sequencing customer relationship is lost or not renewed, and margins retreat as competitors undercut pricing in genomics services; share buybacks pause to preserve cash. That comes out to about $7.15 per share - the business still has real, durable value in this case, mainly from the storage franchise, but growth stalls for several years. Our bull case (roughly a one-in-ten outcome, on the upside) assumes research funding recovers, Azenta wins new large biobank and pharma outsourcing contracts, Multiomics gains share from smaller sequencing competitors, margins keep expanding, and the company's still-strong, debt-free balance sheet supports continued buybacks. That comes out to about $19.84 per share. Given this range, the margin-of-safety price is around $9 per share - a meaningful discount to the base-case estimate, reflecting that this is still a young, three-year track record following two divestitures, with a genomics-services segment that is more cyclical than the storage business. That price also assumes the B Medical Systems sale actually closes (or a binding agreement is signed) without further losses beyond what's already been recognized, and that revenue growth holds up for a couple more quarters. A couple of items we couldn't fully reconcile from the filings: Azenta doesn't separately disclose B Medical's working-capital swings for fiscal 2022 and 2023 (only for fiscal 2025, via a held-for-sale balance sheet), so we approximated those at zero when isolating the continuing business's cash flow for those two years - this adds some imprecision to the fiscal 2023 and 2024 figures specifically. We also excluded fiscal 2022 entirely from this analysis: operating cash flow that year was hugely negative, driven mainly by cash taxes paid on the one-time gain from the 2022 sale of the semiconductor business, and isn't representative of the ongoing business.