$176.39
$322.75
bear $176.39
base $277.72
bull $322.75
margin of safety $180.00
market price* $353.70
Bio-Rad Laboratories makes the reagents, instruments and controls used in two markets: Clinical Diagnostics (about $1.56 billion of 2025 sales, up 1.6%; quality-control materials, blood typing and diabetes testing) and Life Science (about $1.02 billion, down 0.7%; research and bioprocessing tools sold mainly to academic labs and biotech). About 40% of sales are in the United States and 60% abroad, with Europe the largest region; China is a mid-single-digit percentage of sales. Bio-Rad also owns roughly 38% of Sartorius AG's voting shares and 28% of its preference shares, a stake with a reported market value of $5.67 billion at the end of 2025. That stake makes reported profits swing wildly, so we value the operating business and the stake separately. Operating business. We measure what the business earns for its owners: operating cash flow, less swings in receivables, inventory and payables, less stock compensation ($58 million in 2025), less the part of capital spending needed just to stand still. On that basis owner earnings were $218 million in 2025 ($8.00 per share), $222 million in 2024 and $259 million in 2023, against a COVID-era peak of $451 million in 2021. Because the company's $1.6 billion of cash and its investments are counted separately below, we remove the investment income and other receipts they generate (after tax) from the operating stream and add back the roughly $47 million of cash interest paid on debt, since the debt is subtracted separately. That leaves an operating stream of about $228 million in 2023, $200 million in 2024 and $201 million in 2025. We use 2023 to 2025 (median $201 million) and set aside 2020 to 2022, when COVID testing demand and then a $369 million working-capital build distorted results. The 2019 figure on the same basis, about $228 million, sits close to 2023, so the level looks steady across two very different environments. Last year the stream grew 0.4%, and our base case assumes 0% in year one. Sales in the first half of 2026 were $1,243 million versus $1,237 million a year earlier, and 2025 gross margin slipped to 51.9% from 53.7% on higher material costs and inventory write-offs, so nothing in the filings supports assuming acceleration. One cross-check: cash taxes were only $62 million in 2025 versus $99 million in 2024, but 2024 produced the same $200 million stream while paying the higher tax, so the level does not depend on the lower tax bill. Base case: the stream holds at about $201 million a year for ten years, then declines 1% a year indefinitely. We credit no growth: sales have edged down since 2023 (from $2.67 billion to $2.58 billion), and the acquisitions, the Stilla digital PCR business bought in 2025, restructuring savings and any China recovery are not yet visible in results, so they are left out. The slow decline after year ten reflects that only continued R&D (about $276 million a year, 10.7% of sales) renews the product lines, and that the company wrote off $81.7 million (Dropworks) and $127.7 million (Curiosity Diagnostics) of previously acquired technology in December 2025. Those write-offs are non-cash and are properly added back, but they are the reason we do not assume growth from purchases. The operating business is worth about $3,065 million, or $114 per share (26.8 million diluted shares). Bear case: three of Bio-Rad's recent technology purchases were written off or expensed, so we assume $50 million a year is spent on acquisitions that earn nothing (below the roughly $80 million a year paid for acquisitions and purchased research in 2023 to 2025), cutting the stream to about $151 million; Life Science demand and China diabetes-testing reimbursement stay weak, so the stream then falls 3% a year indefinitely. The stake is also assumed worth 30% less than its recent value: Bio-Rad recorded fair-value losses on its equity holdings and a loan receivable, principally Sartorius, of $1.25 billion in 2023 and $2.66 billion in 2024. The operating business is worth about $1,626 million ($61 per share). Bull case: the stream returns to the roughly $228 million it actually delivered in 2019 and 2023, then grows 1.5% a year for ten years (below the 2.5% annual sales growth of 2015 to 2025), then stays flat. The operating business is worth about $4,273 million ($159 per share). Debt and cash. Borrowings are $1.2 billion of senior notes ($400 million at 3.3% due March 2027 and $800 million at 3.7% due March 2032), about $9 million of finance leases and a $30 million potential Stilla earn-out, in total about $1,242 million. Because the notes cost well below 6%, we reduce that by $94 million. Against it, cash and short-term investments were about $1,619 million at June 30, 2026; we keep $350 million for operations and count the other $1,269 million. Net result: the company holds about $121 million ($4.50 per share) more cash than it owes, in every case. The 2027 notes can be repaid from cash, the $200 million credit line is undrawn, and the operating stream covers interest several times over in all three cases, so refinancing is not a concern. Sartorius stake. At June 30, 2026 we estimate the stake at about $5.29 billion (its year-end value less the $380 million fall in Bio-Rad's long-term investments over the first half; the exact June figure was not separately disclosed in the filings we reviewed). Tax of about 19% of value (in line with the deferred tax recorded against investments and intangibles) would be due on a sale, leaving $4.26 billion, or $159 per share, in the base and bull cases and $2.98 billion, or $111 per share, in the bear case. This is the one place where a quoted market price enters our numbers; we assume no sale and no premium. Totals per share: bear $176 (business $61, net cash $4.50, stake $111), base $278 (business $114, net cash $4.50, stake $159), bull $323 (business $159, net cash $4.50, stake $159). Our earlier estimates were $63, $185 and $391. The changes come from counting the company's $1.6 billion of cash and the Sartorius stake explicitly, measuring earnings after working-capital swings, and using a lower, evidence-based upside; the bear is higher and the bull lower, so the range is narrower. What could make this wrong: a further fall in Sartorius' share price or a sale at a discount to market would cut value roughly dollar for dollar, since the stake is more than half of the base value; a sustained drop in research funding or diagnostic reimbursement would push the operating business toward the bear case; and further write-offs of acquired technology would show up as wasted cash. The margin-of-safety price is around $180, close to the bear case.