A Memo To Danaher's Biotechnology Team About Turning Orders Into Sales Trefis Team Thu, November 12, 2026 at 10:13 AM EST 3 min read DHR -0.14% ^GSPC -0.16% SPGI -0.09% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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If you own Danaher (DHR), one business has stood out. Its Biotechnology unit grew sales 7.9% in fiscal 2025 while the company's other two segments together barely grew, and how much the unit adds to Danaher's growth from here depends partly on how fast its bioprocessing orders turn into sales.
Owners are paying up for growth, with Danaher stock trading at 38.2 times earnings compared with 21.9 for the S&P 500. If one of those shareholders sent the Biotechnology team a note this week, it would be short. What would it ask for?
Owners Would Ask Bioprocessing For High Single-Digit Growth
The note would start with what the Biotechnology team means to Danaher. The unit brought in $7.29 billion in fiscal 2025, or 29.7% of company revenue. Danaher's other two segments brought in $17.3 billion together, against $17.1 billion a year earlier, so Biotechnology grew far faster than the rest of the company that year.
The ask would be one thing the team can work on: how fast bioprocessing grows. Management said on the October 21 call that core revenue in the Biotechnology segment increased 5% in the third quarter. Management also said bioprocessing, one of the unit's businesses, has the ability to deliver sustainable high single-digit long-term revenue growth. Owners would ask the team to bring bioprocessing's quarterly growth up to that long-term pace.
Danaher Carries Far More Debt Than A Year Ago
Danaher ended its fiscal third quarter in September 2026 with $26.5 billion of debt, up from $16.9 billion a year earlier. The company's cash position grew as well, leaving debt minus cash at $20.8 billion.
Free cash flow has also risen, climbing to $5.73 billion over the past twelve months from $5.02 billion a year earlier. Debt minus cash equals about 3.6 years of that free cash flow.
Management intends to keep buying companies. They said on the October 21 call that M&A remains their bias for capital allocation, and Leica Biosystems closed the acquisition of StatLab early in the fourth quarter.
Danaher's Bioprocessing Orders Are Growing Faster Than Sales
Bioprocessing orders grew in the mid-teens during the third quarter, management said, while core revenue in bioprocessing grew toward the upper end of mid-single digits. Equipment orders in bioprocessing have stayed in the strong double-digit range so far in 2026, they added. Given those order trends, management said they would expect bioprocessing growth rates to continue to improve in 2027.
The company around the unit is profitable. Danaher's operating margin was 20.4% over the past twelve months, compared with 19.0% for the S&P 500. Not every part of Biotechnology is growing, however. Core revenue in discovery and medical decreased in the low single digits in the third quarter.
What Danaher Shareholders Are Waiting To See
Over the past year, Danaher stock returned 12.3%, against 12.8% for the S&P 500, so the shares have roughly kept pace with the market. The past six months were stronger, with a 42.3% return against 2.9% for the index. Those figures mean the stock lost about 21% in the six months before that, while the index gained about 10%.
Management has not yet given formal guidance for bioprocessing in 2027. They said on the call that they want to see how the fourth quarter shapes up first, calling 4%-5% core revenue growth, excluding respiratory revenue, the right starting point for the whole company in 2027.
Biotechnology's core revenue growth is the figure to watch when Danaher reports its fourth quarter, expected in January 2027.
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