Evaluating Revvity’s (RVTY) valuation after new AI partnership with Eli Lilly

How Lilly's AI partnership will impact Revvity stock

Revvity (RVTY) announces a partnership with Eli Lilly. This embeds Lilly's TuneLab AI and machine learning models within the Revvity Signals platform, connecting equity stories directly to AI-enabled drug discovery workflows.

This movement is based on Revvity's Signals Xynthetica and Models-as-a-Service services. This gives biotech customers a way to apply Lilly's predictive models to their data while protecting sensitive information through a federated learning setup.

Check out our latest analysis for Revvity.

Investors seemed to be reacting to Lilly's announcement, with the stock's 1-day stock return of 2.67% and 90-day stock return of 18.28%, resulting in Revvity of US$104.43. However, recent momentum has been building from a weak base, as the one-year total shareholder return remains negative at 8.04%, and the three-year and five-year long-term total shareholder returns also remain negative.

If you're interested in this AI push, you might want to expand your watchlist to see how other healthcare stocks are doing with healthcare stocks.

Revvity is trading at $104.43, a substantial discount of around 19% and a gap of around 10% to analyst targets, but is the AI-driven optimism already reflected in the price, or is the market underestimating future growth?

Most popular story: 8.7% underrated

Compared to Revvity's previous closing price of $104.43, the most-watched story suggests a slightly higher fair value based on earnings and margin assumptions.

“Fair Value: Slightly increased from approximately $113.67 to $114.38 per share, suggesting a slight increase in intrinsic value.

Discount rate: increased slightly from approximately 8.41% to 8.43%, reflecting a slightly higher required return on equity. ”

Read the whole story.

Want to know what's behind that valuation gap? This story relies on steady revenue growth, margin expansion, and future earnings multiples that are expected to compress over time. Curious about what specific earnings and growth paths are used to justify the results, and how share buybacks factor into the calculations?

Result: Fair value $114.38 (undervalued)

Read the full explanation to understand what's behind the predictions.

However, they still need to weigh reimbursement pressures from China against easing academic and government funding, which could complicate margins and an AI-driven growth story.

Learn about the key risks to this Revvity story.

Another angle on evaluation

Simply Wall Street's DCF model has already warned that Levviti is trading at about 18.5% below its fair value estimate, which, along with the 8.7% discount suggested by the prevailing theory, signals undervaluation. With both stories and spreadsheets lined up like this, a simple question arises: What is missing from both?

Find out how the SWS DCF model arrives at fair value.

Build your own Revvity narrative

If you want to look at your data differently or test your own assumptions, you can build a custom Revvity story in just minutes. Do it your way.

A good starting point for the Revvity research is our analysis which highlights 2 key benefits and 1 important warning sign that could influence your investment decision.

Looking for more investment ideas?

If you care about Revvity, don't stop there. Expand your opportunities by scanning for stocks that fit different income, growth, and thematic angles.

This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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