Avantor, Inc. (NYSE:AVTR) is one of the 11 Best Mid-cap Healthcare Stocks to Buy According to Hedge Funds. The company’s Q1 2025 results exhibited disciplined execution as well as a continued focus on cost management amidst the dynamic macro environment. Even though the company’s earnings and margin performance remained in line with its plan, the Lab Solutions revenue was impacted by lower demand, mainly in its Education and Government end market, after the policy changes. Furthermore, Avantor, Inc. (NYSE:AVTR) has expanded its cost transformation initiative and expects to deliver $400 million in gross run-rate savings exiting 2027.
A team of scientists working together to develop a new lab product or process.
While Avantor, Inc. (NYSE:AVTR)’s cost transformation continues to drive conversion and margins, its Bioscience production segment offers mission-critical materials and solutions. With respect to the Lab business, the company continues to make immediate and significant changes to fuel growth. The company’s delivery excellence initiative remains focused on ensuring greater supply chain efficiency and resilience. Next, Avantor, Inc. (NYSE:AVTR) has been accelerating digital enhancements to its platform, which includes the rollout of a new AI-enabled e-commerce platform, in order to further streamline customer experience. Another step is to strategically optimize the approach to pricing by leveraging the integration of digital technologies.
Broyhill Asset Management, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:
“Shares of Avantor, Inc. (NYSE:AVTR) declined 23% in the first quarter, as policy uncertainty around budget cuts for academic institutions and pharmaceutical companies weighed on the life sciences sector. With shares trading at valuations not previously seen in its history as a public company, we believe this is a dramatic overreaction as the market is essentially discounting a halting or meaningful slowdown in scientific progress at these levels. It is rare for companies benefiting from such strong secular growth trends to be valued at trough multiples on trough earnings, but that’s exactly how we view AVTR today, and exactly why we’ve capitalized on recent weakness to continue building our position.”
While we acknowledge the potential of AVTR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
