3 Reasons to Sell MIR and 1 Stock to Buy Instead

April 08, 2025 at 05:06 AM EDT

MIR Cover Image

While the broader market has struggled with the S&P 500 down 10.6% since October 2024, Mirion has surged ahead as its stock price has climbed by 8.2% to $13.70 per share. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move.

Is there a buying opportunity in Mirion, 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.

Despite the momentum, we're sitting this one out for now. Here are three reasons why MIR doesn't excite us and a stock we'd rather own.

Why Is Mirion Not Exciting?

With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.

1. Fewer Distribution Channels Limit its Ceiling

With $860.8 million in revenue over the past 12 months, Mirion is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

2. Shrinking Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Analyzing the trend in its profitability, Mirion’s operating margin decreased by 7.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Mirion’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers. Its operating margin for the trailing 12 months was 3.3%.

Mirion Trailing 12-Month Operating Margin (GAAP)

3. Previous Growth Initiatives Haven’t Paid Off Yet

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Mirion’s five-year average ROIC was negative 0.5%, meaning management lost money while trying to expand the business. Its returns were among the worst in the business services sector.

Mirion Trailing 12-Month Return On Invested Capital

Final Judgment

Mirion isn’t a terrible business, but it isn’t one of our picks. With its shares beating the market recently, the stock trades at 27.3× forward price-to-earnings (or $13.70 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. Let us point you toward a dominant Aerospace business that has perfected its M&A strategy.

Stocks We Like More Than Mirion

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