Avantor’s third quarter results were met with a significant negative market reaction, reflecting investor concerns surrounding both the scale and persistence of operational headwinds. Management explicitly acknowledged disappointing performance, with CEO Emmanuel Ligner describing the period as marked by "self-inflicted" challenges in commercial and operational execution. Ligner attributed underwhelming revenue trends to complexity in the go-to-market model, weak customer activity in laboratory solutions, and ongoing production issues in bioprocessing. He also emphasized that recent share losses, particularly in the lab segment, were exacerbated by inadequate empowerment of frontline commercial teams and underinvestment in supply chain reliability.
Is now the time to buy AVTR? Find out in our full research report (it’s free for active Edge members).
Avantor (AVTR) Q3 CY2025 Highlights:
- Revenue: $1.62 billion vs analyst estimates of $1.65 billion (5.3% year-on-year decline, 1.4% miss)
- Adjusted EPS: $0.22 vs analyst estimates of $0.23 (in line)
- Adjusted EBITDA: $267.9 million vs analyst estimates of $268.3 million (16.5% margin, in line)
- Operating Margin: -40%, down from 7.3% in the same quarter last year
- Organic Revenue fell 4.7% year on year vs analyst estimates of 3% declines (167.7 basis point miss)
- Market Capitalization: $7.90 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Avantor’s Q3 Earnings Call
- Vijay Kumar (Evercore ISI) asked about management’s confidence in fixing operational issues and the timing of improvement. CEO Emmanuel Ligner stressed that challenges are "fixable" and highlighted the new leadership team’s focus on accountability and execution.
- Michael Ryskin (Bank of America) inquired about strategies to address recent share losses and competitive dynamics. Ligner detailed plans to empower sales teams, upgrade digital platforms, and focus on key brands to stabilize and regain market share.
- Daniel Brennan (TD Cowen) questioned pricing dynamics and the extent of past market share losses. CFO Brent Jones explained ongoing pricing efforts and noted that recent contract losses are still affecting results, but new wins will take time to ramp up.
- Tycho Peterson (Jefferies) sought clarity on the rationale for launching a share repurchase amid volatility and early turnaround efforts. Ligner justified the buyback as a sign of long-term confidence, while emphasizing that operational improvement is the primary focus.
- Douglas Schenkel (Wolfe Research) pressed for specifics on the timeline for a full strategic assessment and the prospects for margin expansion in the face of ongoing investments. Ligner committed to providing a detailed plan in the next quarter, while Jones acknowledged margin pressures will persist until turnaround measures take hold.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) evidence of operational improvements in bioprocessing, particularly reduced backlogs and increased plant efficiency; (2) progress in digital platform enhancements and salesforce empowerment within laboratory solutions; and (3) the impact of leadership changes and new hires on execution and accountability. We will also watch for updates on the company’s cost transformation program and any portfolio adjustments aimed at sharpening focus and profitability.
Avantor currently trades at $11.50, down from $15.07 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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