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BRKS – Market expectations are for Uniform ROA to expand, but management may have concerns about their acquisitions, their life sciences business, and growth

October 15, 2020
  • Brooks Automation, Inc. (BRKS:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 27.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about the potential of their GENEWIZ and RURO acquisitions, their life sciences business, and their ability to sustain overall growth
  • Specifically, management may lack confidence in their ability to sustain life sciences services revenue and growth, particularly in GENEWIZ, support cell and gene therapy through next generation sequencing (NGS), and further generate profitability synergies throughout the business. Furthermore, they may have concerns about the potential of their RURO acquisition and their ability to maintain growth in areas affected by the coronavirus pandemic. Management may also lack confidence in their ability to sustain strong growth and margins for the semiconductor business, continue securing design wins, and maintain the strength of their foundry drivers