Is BIO a good stock to buy?We came across a bullish thesis on Bio-Rad Laboratories, Inc. on One Idea Per Day's Substack by Paul. The thesis was published on July 21st, when the stock was trading at $281.11, and BIO has gained 32.48% since then. The rise appears to reflect investor hopes that activist investor Elliott can help Bio-Rad unlock value from its Sartorius stake and improve its business, reinforcing the recovery already seen since April. In this article, we will summarize the bulls' thesis on BIO. Bio-Rad Laboratories, Inc.'s share was trading at $372.43 as of October 26th 2026. BIO's trailing and forward P/E were 45.06 and 40.32 respectively according to Yahoo Finance.
This isn't the first time we see a life sciences company pitched as a great investment. BIO shares gained 12.71% over the last 12 months. Comparable stocks like Thermo Fisher Scientific and Danaher gained 22.82% and 7.41%, respectively, during the same period. Why are life sciences stocks rising, and is it really a good time to buy them?
Looker_Studio/Shutterstock.com
In April, we published an article about the 9 Most Undervalued Healthcare Stocks to Buy Now and BIO ranked #6 in that article. BIO returned 32.33% since then. So, hedge funds were right about BIO. This article explains why hedge funds were bullish on BIO. Before getting into our analysis, let's take a look at the business and why some investors like the stock so much.
Bio-Rad Laboratories, Inc. (NYSE:BIO) is a life-science tools and diagnostics company with a unique investment setup centred around its large minority stake in Germany's Sartorius, a fast-growing bioprocessing supplier. That stake alone is worth roughly $5 billion, yet Bio-Rad's entire market value is only around $7.8 billion. In other words, investors are paying just a couple of billion dollars for the rest of Bio-Rad's actual business.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
Elliott Investment Management has built a large position in the company and argues that the market isn't giving Bio-Rad credit for what its Sartorius stake is really worth. Adding to the confusion, Bio-Rad's reported profits swing sharply because they are tied to changes in that investment's value — the company posted about $760 million in net income in 2025 after a steep loss the year before. This mismatch between what Bio-Rad owns and what it's valued at is the core of the story, but closing that gap depends on the company's unusual ownership structure.
The bullish argument is essentially that Bio-Rad trades at a "holding company discount": the market prices in the value of the Sartorius stake but barely values Bio-Rad's own life-science tools and diagnostics operations. Strip out the roughly $5 billion Sartorius stake, and investors are paying about $3 billion for a business generating around $2.6 billion in annual revenue — a modest price. Elliott believes Bio-Rad can close this gap by selling down or otherwise monetizing the Sartorius stake, returning more capital to shareholders, and running its operations more efficiently.
The case for Bio-Rad rests heavily on the value of what it owns, not yet on proof that management can convert that value into returns for shareholders. Elliott also holds shares directly in Sartorius, giving it a stake in both sides of the story. However, the Schwartz family controls roughly 80% of board voting power through special Class B shares, which limits how much pressure Elliott can actually apply. If Bio-Rad were to launch a strategic review, announce a capital-return plan, or partially sell its Sartorius stake, the discount to its true value could start to close.
The underlying business remains a risk to this story. First-quarter 2026 earnings came in below expectations, and management cut its outlook for the year — a sign the core operations aren't currently supporting the investment case on their own. If life-science spending stays weak or diagnostics growth slows further, the operating business could keep dragging on sentiment even while the Sartorius stake holds its value. (see how Danaher's bioprocessing results could affect Bio-Rad ). Because so much of Bio-Rad's value depends on this one asset rather than on business growth, investors need real evidence that management will actually act to unlock it.
A separate risk comes from regulatory oversight of Bio-Rad's diagnostic products. These products require clearances and ongoing compliance, and the company says regulatory action could delay approvals, restrict production, or trigger recalls. If requirements change or a review delays a product update, Bio-Rad could face added costs or lose sales in affected markets, even if lab demand improves. Investors should watch clearance timelines and regulatory changes.
Unlike many stocks, Bio-Rad's value isn't really about growth trends in its own business — it's about the size of its Sartorius stake versus its own low market valuation. The opportunity for investors mainly comes from that valuation gap narrowing, not from the underlying business suddenly accelerating, though the operating segments still need to stabilize to support a higher valuation.
Bio-Rad shares have fallen sharply since peaking in 2021, and weaker operating results have put more attention on Elliott's campaign and the value sitting on Bio-Rad's balance sheet. Going forward, investors should watch how Bio-Rad responds to Elliott — whether that means board changes, a strategic review, or a plan involving the Sartorius stake. Upcoming quarterly results and the 2026 outlook will show whether the core business is steadying, while any share buybacks or capital returns would be a sign that the discount is starting to close.
The appeal of Elliott's thesis is straightforward: Bio-Rad owns something valuable that the market doesn't seem to be pricing in fully, but forcing change is difficult when a single family controls the board. Selling down the Sartorius stake could unlock real value, though it would come with tax costs, could weigh on Sartorius's own share price, and doesn't solve the weakness in Bio-Rad's operating business.
Hedge fund positioning shows a strong signal for Bio-Rad Laboratories, Inc. compared with its larger life-science peers. As per our database, 40 hedge funds held Bio-Rad Laboratories, Inc. at the end of the second quarter, up from 35 the previous quarter. That's a meaningful jump, and it suggests institutional investors are growing more confident that Elliott's involvement could help close the gap between Bio-Rad's market value and its Sartorius stake. By comparison, Danaher Corporation (NYSE:DHR) was held by 108 hedge funds, down from 110, Thermo Fisher Scientific Inc. (NYSE:TMO) was held by 118 hedge funds, up from 115, and Agilent Technologies, Inc. (NYSE:A) was held by 62 hedge funds, down from 63 — a mixed picture among the larger peers, even as Bio-Rad's own numbers moved higher.
Short interest data also paints a fairly cautious picture for Bio-Rad Laboratories, Inc. relative to its peers. About 7.44% of Bio-Rad Laboratories, Inc.'s float is sold short, well above Danaher Corporation at 1.43%, Thermo Fisher Scientific Inc. at 1.46%, and Agilent Technologies, Inc. at 2.11%. This suggests Bio-Rad Laboratories, Inc. is drawing considerably more skepticism than all three peers, as investors weigh its softer operating results and the governance obstacles to unlocking the value of its Sartorius stake.
Valuation Analysis
BIO's P/B is 1.38x. Danaher Corporation, Thermo Fisher Scientific Inc., and Agilent Technologies, Inc. trade at P/B multiples of 3.02x, 4.73x, and 6.63x, respectively. BIO's own P/B was 1.21x on December 31, 2025, making its current valuation approximately 14% higher than it was then. We believe the current valuation reflects concerns about weak operating performance, family control, and uncertainty over whether Bio-Rad will unlock value from its Sartorius stake. However, the discount to peers appears substantial given the value of that investment, though differences in the companies' businesses mean the comparison alone does not establish that BIO is undervalued. At year-end 2025, Bio-Rad's Sartorius holding was valued at $5.67 billion, about 76% of its $7.45 billion in shareholders' equity. We believe BIO can justify a higher valuation if it stabilizes its operating business and shows how shareholders can benefit from the stake. Until then, the shares look like a wait-and-see investment, with an attractive entry dependent on clearer progress despite the apparent asset-value discount.
Previously, we covered a bullish thesis on Thermo Fisher Scientific Inc. (TMO) by FluentInQuality in March 2025, which highlighted recurring revenue, laboratory solutions, strong margins, capital efficiency, and long-term healthcare growth opportunities. TMO's stock price has appreciated by approximately 30.79% since our coverage.We believe BIO could become a good long-term investment if it unlocks value from its Sartorius stake and stabilizes operations, but we would wait for clearer evidence of progress before buying.
Bio-Rad Laboratories, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds . While BIO could benefit from a plan to unlock value from its Sartorius stake and clearer improvement in its core business, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than BIO that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock .
Disclosure: None.
