While the S&P 500 is up 26.5% since April 2025, Bio-Techne (currently trading at $59.58 per share) has lagged behind, posting a return of 19.2%. This may have investors wondering how to approach the situation.
Is there a buying opportunity in Bio-Techne, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free for active Edge members.
Why Do We Think Bio-Techne Will Underperform?
We're swiping left on Bio-Techne for now. Here are three reasons we avoid TECH and a stock we'd rather own.
1. Slow Organic Growth Suggests Waning Demand In Core Business
Investors interested in Research Tools & Consumables companies should track organic revenue in addition to reported revenue. This metric gives visibility into Bio-Techne’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Bio-Techne’s organic revenue averaged 3.1% year-on-year growth. This performance slightly lagged the sector and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. 
2. Fewer Distribution Channels Limit its Ceiling
Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.
With just $1.22 billion in revenue over the past 12 months, Bio-Techne is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.
3. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Bio-Techne’s margin dropped by 12 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Bio-Techne’s free cash flow margin for the trailing 12 months was 21%.
Final Judgment
We see the value of companies making people healthier, but in the case of Bio-Techne, we’re out. With its shares underperforming the market lately, the stock trades at 29.7× forward P/E (or $59.58 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. We’d suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
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