Thermo Fisher (TMO) Shows Modest Gains a Month After Latest Earnings Release

One month has elapsed since Thermo Fisher Scientific (TMO) published its quarterly earnings results. During this period, the stock has climbed approximately 0.2%, managing to keep pace with broader market movements. As we head toward the next earnings announcement, a critical question emerges: will this upward momentum persist, or should investors prepare for a potential decline? Let’s examine the most recent financial performance to identify what might drive future price action.

Strong Earnings Performance Lifts TMO Above Expectations

Thermo Fisher Scientific delivered impressive third-quarter 2025 results that exceeded analyst predictions. The company reported adjusted earnings per share of $5.79, surpassing the Zacks Consensus Estimate by 5.27%. More notably, this figure represented a year-over-year increase of 9.7%, demonstrating continued profitability expansion. The adjusted EPS figure removes certain non-recurring items such as asset amortization and restructuring charges. On a GAAP basis, the company reported $4.27 per share, remaining flat compared to the prior year period.

Revenue Growth Outpaces Market Expectations

TMO’s top-line performance proved equally solid. Quarterly revenues reached $11.12 billion, up 4.9% from the year-ago quarter and exceeding the Zacks consensus figure by 1.99%. More importantly, organic revenue growth—excluding acquisitions and currency fluctuations—accelerated to 3% year over year, suggesting underlying business momentum remains intact.

Business Segment Breakdown Reveals Mixed Results

Thermo Fisher operates four distinct business divisions, each showing different momentum:

The Life Sciences Solutions segment, representing 23.3% of total revenues, demonstrated the strongest growth trajectory. Revenues in this division reached $2.59 billion, up 8.4% year over year and outperforming internal estimates of $2.41 billion.

Analytical Instruments, accounting for 17% of revenues, posted $1.89 billion in sales, representing 4.7% year-over-year growth. This segment slightly exceeded internal projections.

The Specialty Diagnostics business, comprising 10.6% of revenues, generated $1.17 billion in quarterly sales with 4% year-over-year growth, though this fell marginally short of the $1.18 billion projection.

Laboratory Products and Biopharma Services, the company’s largest segment at 53.7% of total revenues, contributed $5.97 billion in quarterly sales with 4% year-over-year expansion, surpassing the $5.89 billion internal estimate.

Profitability Margins Expand Despite Cost Pressures

TMO demonstrated impressive operational leverage in the quarter. Gross margin came in at 41.8%, up 14 basis points from the prior year despite a 4.7% increase in cost of revenues. Selling, general and administrative expenses rose 3.2% to $1.80 billion, while research and development spending remained flat at $346 million year over year.

The adjusted operating margin expanded to 22.6%, a gain of 56 basis points compared to last year’s quarter, indicating the company is successfully converting incremental revenues into profits.

Balance Sheet Position Shows Strategic Capital Deployment

TMO ended Q3 2025 with $3.55 billion in cash and short-term investments, compared with $6.39 billion in the prior quarter. This decline reflects capital deployment initiatives. Year-to-date operating cash flow reached $4.36 billion versus $5.38 billion in the comparable nine-month period last year. The company maintains a robust dividend track record, with annualized dividend growth averaging 14.15% over the past five years.

Analyst Sentiment Shifts to More Conservative Stance

Since the earnings release, forward-looking estimates for TMO have shifted downward. This revision pattern suggests analysts are becoming more cautious about near-term growth prospects and earnings potential.

Current Valuation Metrics Present a Mixed Picture

Thermo Fisher currently carries a VGM Score profile with a Growth rating of F and a similar Momentum score, indicating the stock lacks the dynamic characteristics that appeal to growth-oriented investors. Conversely, the Value score stands at C, placing it in the middle 20% of the market for value-conscious strategies. Overall, the stock receives an aggregate VGM Score of F, suggesting limited appeal across multiple investment philosophies.

Rating and Outlook: Expect Steady Performance

With a Zacks Rank #3 (Hold) designation and considering the magnitude of recent estimate revisions pointing downward, expectations have been reset lower. The stock is positioned for in-line performance over the coming months, neither significantly outperforming nor underperforming the broader market.

Peer Comparison: ISRG Shows Stronger Momentum

Within the Medical-Instruments sector, Intuitive Surgical (ISRG) has gained 0.2% over the same one-month period that TMO has been moving sideways. Intuitive Surgical’s most recent quarter showed more dynamic metrics: revenues hit $2.51 billion (+22.9% year over year) and EPS reached $2.40 versus $1.84 in the prior year. Forward estimates for Intuitive Surgical peg earnings at $2.25 per share for the current quarter, representing 1.8% year-over-year growth. Analyst consensus estimates for ISRG have risen 2.2% over the past month, and the company maintains a Zacks Rank #3 rating with a VGM Score of D, suggesting relatively better positioning than TMO within the peer group.