Is Agilent Technologies (A) Overlooked Amid Rising Institutional Interest?

Agilent Technologies (A) has emerged as a focal point for investors in Q3 2025, with institutional ownership surging despite its elevated valuation metrics. The company's recent financial performance and strategic guidance suggest a compelling narrative, but whether the stock is truly undervalued-or simply overhyped-requires a closer look at the interplay between institutional accumulation and valuation fundamentals.

Valuation Metrics: A Tale of Contradictions

Agilent's price-to-earnings (P/E) ratio stands at 34.67, significantly higher than the Healthcare sector average of 24.7 but lower than its peer group average of 40.95, according to FullRatio. This places Agilent in a middle ground, neither the cheapest nor the most expensive stock in its industry. However, its P/E-to-growth (PEG) ratio of 4.67, according to GuruFocus, raises red flags, indicating that the stock is overvalued relative to its earnings growth expectations. For context, a PEG ratio below 1 typically signals undervaluation, while above 1 suggests overvaluation.

The company's price-to-book (P/B) ratio of 34.67 and price-to-sales (P/S) ratio of 34.67, according to MarketBeat, further underscore its premium valuation. Meanwhile, the enterprise value-to-EBITDA (EV/EBITDA) ratio of 22.88, according to Value Investing, appears reasonable at first glance but must be contextualized against industry benchmarks. While no direct peer data is provided, Agilent's EV/EBITDA is likely in line with or slightly above the sector average, given its high P/E and PEG ratios.

Institutional Buying: A Vote of Confidence?

Despite these valuation headwinds, institutional investors have aggressively accumulated Agilent shares. Harvest Portfolios Group Inc. increased its stake by 24.3% in Q2 2025, now holding 506,999 shares valued at $59.83 million, according to MarketBeat. Other notable buyers include Vontobel Holding Ltd. (+16.3%), DAVENPORT & Co LLC (+14.9%), and Novem Group (+30.2%), according to MarketBeat. Institutional ownership now accounts for 87.41% of the company's stock, according to MarketBeat, a level that suggests strong conviction in Agilent's long-term prospects.

This institutional activity contrasts sharply with Agilent's valuation metrics. Typically, rising institutional interest correlates with undervaluation or growth potential. Yet Agilent's PEG ratio implies that its growth is insufficient to justify its current price. This disconnect raises a critical question: Are institutions betting on future growth that isn't yet reflected in today's metrics?

Historical Context: A Decade of Volatility

Agilent's P/E ratio has historically swung between extremes, peaking at 118.44 in January 2018 and hitting a low of 20.66 in July 2019, according to FullRatio. The current P/E of 34.67 is below its 10-year average of 37.5 but above the 3- and 5-year averages, according to FullRatio. This suggests that while the stock is not at an all-time high in terms of valuation, it remains priced for optimism.

Institutional investors, however, appear unfazed by these metrics. For example, Mitsubishi UFJ Asset Management Co. Ltd. increased its stake by 8.2% in Q4 2024, according to MarketBeat, and State Street Corp. added 1.2% in Q3 2025, according to MarketBeat. These moves indicate that institutions are prioritizing Agilent's growth trajectory over short-term valuation concerns.

The Dividend Angle: A Small But Stable Yield

Agilent's quarterly dividend of $0.248 per share yields 0.7%, according to GuruFocus, a modest return but one that comes with a conservative payout ratio of 23.24%, according to GuruFocus. This suggests the company has ample room to increase dividends in the future, a factor that may appeal to income-focused institutional investors. However, the yield is far below the average for the sector, which could limit its attractiveness to certain funds.

Conclusion: Overlooked or Overvalued?

Agilent Technologies presents a paradox: a stock with strong institutional backing but valuation metrics that suggest overvaluation. The key to resolving this paradox lies in the company's ability to deliver on its growth expectations. With Q3 revenue growth of 10.1% year-over-year, according to MarketBeat, and a full-year revenue outlook of $6.91–6.93 billion, according to MarketBeat, Agilent is clearly executing well operationally. However, its PEG ratio of 4.67, according to GuruFocus, indicates that the market is pricing in growth that may not materialize.

Institutional investors, it seems, are betting that Agilent can outperform these expectations. Their aggressive accumulation suggests confidence in the company's long-term potential, even if current valuation metrics appear stretched. For individual investors, the decision to follow suit hinges on whether they believe Agilent can sustain its growth and justify its premium.