Agilent Technologies operates analytical instruments and services for life sciences and applied markets and presents a high-quality financial profile characterized by a five-year diluted EPS compound annual growth rate of 12.39% and trailing return on equity of 22.6% as of the most recent observation.
The company shows durable margin and return characteristics: gross margin was 45.3% and operating margin 17.4% in the most recent available period, with a trailing net margin near 13.5%, supporting consistent profitability. Balance-sheet metrics are conservative, with interest coverage of 10.85x, net debt effectively near zero, and debt-to-equity at 0.1468, while liquidity measured by the current ratio is 1.64, indicating manageable leverage and short-term coverage. These outcomes accompany sustained per-share growth, reflected in a recent revenue-per-share of $17.11 alongside a five‑year EPS CAGR of 12.39% (Return on Equity (ROE), Profit Margin Trends, EPS Diluted & Revenue per Share, Revenue & EPS Growth).
Notable areas of concern include valuation and earnings volatility. The trailing P/E expanded to 45.7x in the latest quarter, well above the mid‑2010s range and reflecting elevated market expectations (Price-to-Earnings (PE) Ratio Trend). Reported profitability has swung materially: trailing twelve‑month net income fell from about $1.14B at one point to 719M most recently, and diluted EPS moved from a peak of \$3.65 to \$2.30 while revenue rose to $5.34B, indicating some decoupling between top-line scale and near-term earnings (Revenue & Net Income, EPS Diluted & Revenue per Share). Financing cash flow also shifted toward larger net outflows, with a TTM financing cash flow of -\$717M, which bears watching in the context of capital allocation choices (Strategic Capital Allocation, Earnings Quality Analysis).
Key fundamentals to monitor going forward are top-line traction and per‑share revenue (most recent revenue $5.34B and rev/share \$17.11), the stability of EPS and net income (latest EPS \$2.30; TTM net income \$719M) and the relationship between operating cash flow and earnings (most recent OCF TTM $1.02B versus net income \$719M), margin trends (gross ~45.3%, operating ~17.4%, net ~13.5%) and the P/E trend (45.7x) alongside ongoing financing cash flow patterns (-\$717M).
The foundation of business quality and long-term value creation
AGILENT TECHNOLOGIES, INC.'s recent reported revenue in the dataset shows a top-line reading of $5.34B for the period ending 2020-10-31, with the prior revenue observation in the file at $4.91B for 2018-10-31. Net income has strengthened in the most recent quarters: it rose from $199.0M in the period ending 2020-07-31 to $323.0M in the period ending 2020-10-31, after several quarters clustered around $190M–$200M earlier in 2019–2020.
Most Recent Revenue: $5.34B
Most Recent Net Income: $323.0M
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Nov 2019 to Oct 2020, Agilent Technologies Inc generates $5.34B in revenue. After accounting for taxes and expenses, the company retains 13.5% as net profit margin, resulting in $0.72B in net earnings from $5.34B in revenue.
Period Information
Report Type: Annual (10-K)
Period: Nov 2019 to Oct 2020
Analyzing long-term margin stability and competitive positioning
AGILENT TECHNOLOGIES, INC.'s net profit margin shows variability across the available history: 12.6% at 2010-10-31, falling to a trough of 6.4% at 2018-10-31, then rising to 13.5% at 2020-10-31. The key inflection point is the decline into 2018 followed by a recovery to a higher level by 2020, with the most recent net margin at a new high relative to the 2018 observation.
Most Recent Values:
Understanding Profit Margins
Between Nov 2019 and Oct 2020, Agilent Technologies Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
AGILENT TECHNOLOGIES, INC.'s trailing twelve-month net income shows notable variability over the period provided. Net income rose to about $1.14B in the 2019-01-31 TTM observation and subsequently declined, with the most recent net income TTM in the dataset falling to $719.0M as of the 2020-10-31 period end. Earlier intermediate values include lower outcomes in 2018 (e.g., $316.0M and $196.0M) and several mid-range results in prior years, indicating oscillating profitability before the decline into 2020.
Operating cash flow (TTM) readings available in the dataset are fewer but show that cash generation was $1.02B at the 2019-10-31 observation, which exceeds the most recent net income figure in the dataset by roughly $300M. Earlier operating cash flow points include $711.0M in 2014 and $1.26B in 2011, reflecting variability over a longer horizon. The most recent net income TTM was $719.0M (period end 2020-10-31) and the most recent operating cash flow TTM available in this dataset was $1.02B (period end 2019-10-31).
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
AGILENT TECHNOLOGIES, INC.'s trailing twelve-month return on equity increased sharply in the most recent reporting period, rising to 22.6% at period end 2019-01-31 from 6.9% at 2018-10-31. This constitutes a clear inflection point between those two most recent observations, with the latest reading more than triple the immediately prior quarter's level.
Earlier reported ROE values show lower and variable levels: 10.9% (2016-10-31) and 12.8% (2016-04-30), and a prior higher reading of 21.1% at 2010-10-31. The most recent ROE of 22.6% is higher than the 2016 readings and slightly above the 2010 value. The most recent ROE was 22.6% as of 2019-01-31.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
AGILENT TECHNOLOGIES, INC.'s trailing twelve-month financing cash flow has moved toward larger net outflows in the most recent data, rising to a net outflow of $-717.0M for the period ending 2020-10-31 from $-299.0M for the period ending 2019-10-31. Financing activity shows volatility over the series with earlier large outflows recorded (for example $-1.07B in 2015 and $-1.69B in 2011), but the most notable recent inflection is the increased financing outflow in 2020.
Operating cash flow on a TTM basis has been positive and stood at $1.02B in the period ending 2019-10-31, up from $711.0M in the 2014 period and below a prior $1.26B observation in 2011.
Investing cash flow TTM has been consistently negative in the available observations, with the latest reported investing outflow of $-238.0M for the period ending 2016-10-31 (previous observed investing outflow was $-248.0M in 2013). The latest observed values are:
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
AGILENT TECHNOLOGIES, INC.'s trailing twelve-month P/E shows a multi-year range with a period of relative stability in the mid-to-high 20s and low 30s through 2015–2017, a sharp spike to 116.9x at 2018-01-31, and material contraction thereafter to 20.8x by 2019-01-31. After that trough, the ratio recovered to 45.7x in the most recent quarter. The series displays two clear inflection points: the pronounced peak in early 2018 and the subsequent drop into early 2019.
Focusing on the most recent data, the P/E has risen from 20.8x (2019-01-31) to 45.7x (2020-10-31), making the current level notably higher than the mid-2010s baseline but below the early‑2018 peak. The most recent Price-to-Earnings (P/E) ratio observed was 45.7x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.