Avantor, Inc.

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 3✗ 32▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)5/10 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)6/10 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)7.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-3.8% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-248.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE5.8%

  ✗Lynch> 15%

  EBIT / Enterprise Value3.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.5%, ROC=31.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-4.50%

  ✗PiotroskiROA > 0

  ROA Change YoY5.87% -> -4.50% (delta: -10.37%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=5.29%, ROA=-4.50%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY33.6% -> 32.7%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue4.8%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity5.8%

  ✗Dreman> 12%

  Margin of SafetyP/B=1.9x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity2.8% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-325.8% (IV=$3.65 vs Price=$15.54)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency6/9 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue7.3%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity5.8%

  ✗Ackman>= 15%

  5-Year EPS CAGR84.4% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend10.0% (2023) -> -3.8% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 33.9% -> 32.7%, operating margin 10.0% -> -3.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+3.20%; #2303/6340 (top 36.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+18.03%; #2187/3702 (top 59.1%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+5.78%; #2368/5226 (top 45.3%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0373; #2189/5884 (top 37.2%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR84.4% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years5/9 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation models0% pass✗ 7▾

  AVTR overvalued: all 7 models price fair value below $15.54 (median $7.77)

  Greenblatt fair value$5.96

  ✗Greenblatt-160.7% margin vs $15.54

  Dreman fair value$3.65

  ✗Dreman-325.8% margin vs $15.54

  Munger fair value$8.14

  ✗Munger-90.9% margin vs $15.54

  Pabrai fair value$15.52

  ✗Pabrai-0.1% margin vs $15.54

  Akre fair value$8.58

  ✗Akre-81.1% margin vs $15.54

  Ackman fair value$6.75

  ✗Ackman-130.2% margin vs $15.54

  Templeton fair value$7.77

  ✗Templeton-100.0% margin vs $15.54
• Valuation8% pass✓ 4✗ 24▾

  12 of 13 flag AVTR's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS63.9x

  ✗Graham<= 15x

  Price-to-Book Ratio1.9x

  ✗Graham<= 1.5x

  P/E x P/B121.00

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value3.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.5%, ROC=31.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)16.9x

  ✗Dreman< 8x

  Price / Book Value per Share1.9x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-2.4%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=4.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=1.9x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-325.8% (IV=$3.65 vs Price=$15.54)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share21.3x

  ✓Ackman<= 25

  Price vs. Trailing Low198% of trailing low ($7.84)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+3.20%; #2303/6340 (top 36.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.5542; #2679/6449 (top 41.5%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+77.9%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.6302; #2327/5247 (top 44.3%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+4.17%; #1756/4519 (top 38.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+96.71%; #344/6202 (top 5.5%)

  ✓OshaughnessyTop 10% of eligible cross-section
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag AVTR's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 7.5% vs Rev: 0.9%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$-2.75 (2017) -> $-0.78 (2025)

  ✗DremanPositive over recent years

  EPS CAGR84.4% CAGR over 4 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency6/9 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-3.4%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR84.4% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 33.9% -> 32.7%, operating margin 10.0% -> -3.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR0.5%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR84.4% over 4 years

  ✗Neff7%-20% annualized
• Verdicts13% pass✓ 2✗ 13▾

  Split decision: 12 FAIL · 2 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (0/7)✗GreenblattRank #1242✓PiotroskiPASS (F-Score 4)✗DremanFAIL (4/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)•AckmanNEUTRAL (6/9)✗TempletonFAIL (3/8)✓SleepPASS (3/6)✗AsnessFAIL (Rank #742/2370 (Top 31.3%))✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag AVTR's efficiency — Graham, Buffett, Piotroski +3 more

  Current Ratio1.89

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)5.4%

  ✗Buffett> 10%

  ROIC - WACC-4.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)31.0%

  ✓Greenblatt> 25%

  Current Ratio Change YoY1.07 -> 1.78

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.56x -> 0.56x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.89

  ✓Dreman> 1.5

  Return on Invested Capital4.0%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=5.1%; FY2024: ROIC=8.6%; FY2025: ROIC=-2.0%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -2.0%)

  ✗SleepROIC > 12% in a majority of years
• Debt & Leverage33% pass✓ 6✗ 9▾

  8 of 12 flag AVTR's debt & leverage — Graham, Buffett, Lynch +5 more

  LT Debt vs Net Current AssetsLT Debt $3.6B vs NCA $1.2B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.63, IC: 3.0x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.63

  ✗Lynch< 0.33

  Cash - Long-term Debt$-3.2B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change26.70% -> 33.20%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.89

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.63

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.63

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=3.0x, D/EBITDA=4.1x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.63

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.6312; #2718/4210 (top 64.6%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow50% pass✓ 7✗ 5▾

  5 of 10 pass — Buffett, Lynch, Dreman +2 more object

  Free Cash Flow Proxy$-248.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$439.2M

  ✗LynchPositive and growing

  Operating Cash Flow$623.8M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=5.29%, ROA=-4.50%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)16.9x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=4.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive8/9 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap4.2%

  ✓Ackman>= 4%

  Price / FCF per Share21.3x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency8/9 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$439.2M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+4.17%; #1756/4519 (top 38.9%)

  ✗OshaughnessyTop 10% of eligible cross-section