Bio-Techne Corp.: A Hidden Gem Amid Sector Strength—Why the Dip is a Buying Opportunity

The life sciences sector has been a beacon of resilience in 2025, fueled by breakthroughs in cell and gene therapy, precision diagnostics, and tools for next-generation biomanufacturing. Yet Bio-Techne Corp. (NASDAQ: TECH) has underperformed relative to peers, with its stock price lagging despite its critical role in enabling these trends. This divergence presents a compelling opportunity for investors: a company with a diversified portfolio, near-term catalysts, and undervalued metrics is primed to rebound. Let's dissect the data and assess why now could be the time to buy.

Q1 2025: Mixed Results, But Strategic Momentum Intact

Bio-Techne's Q1 2025 earnings reflected both challenges and opportunities. Total revenue grew 5% to $289.5 million, driven by the Diagnostics & Spatial Biology segment, which surged 14% on strong adoption of spatial biology tools like the COMET platform and exosome-based diagnostics. However, the Protein Sciences segment stalled at $204.5 million, pressured by product mix shifts and incentive compensation costs.

The headline miss—GAAP EPS fell to $0.21 from $0.31 a year earlier—sparked skepticism. Yet adjusted EPS rose to $0.42, and operating cash flow jumped 8% to $63.9 million. The real story lies in the cell and gene therapy (CGT) vertical, where revenue grew over 60% in GMP reagents, and the Ella platform (an automated viral titer testing tool) is gaining traction. Management noted 58 CGT customers in clinical trials and 400 in the sales funnel, signaling long-term upside.

Near-Term Catalysts: Ella, Leo, and CGT's Inflection Point

Bio-Techne's growth hinges on two key innovations:
1. The Ella Platform: A workhorse for CGT developers, it automates multiplex immunoassays, reducing testing time and human error. With viral vector production critical to CGT commercialization, Ella's adoption is accelerating.
2. The Leo Platform (Simple Western): A high-throughput protein analysis tool, it enables precise quantitation for drug development and manufacturing. Together, these tools position Bio-Techne as an indispensable partner in the $100B CGT pipeline.

While the Q1 flatline in Protein Sciences spooked investors, the segment's 41.2% operating margin in Q2 2025 (per subsequent reports) signals stabilization. The China market, which dipped due to funding delays, is expected to recover as tenders reopen. Meanwhile, Wilson Wolf (a 20% equity stake) contributed 30% growth, underscoring Bio-Techne's diversified exposure to biomanufacturing.

Valuation: Expensive on P/E, Cheap on P/S and EV/EBITDA

Bio-Techne's valuation is a puzzle. At a P/E of 61.5x, it's 34% above its peer median (45.9x). But dig deeper:
- Price-to-Sales (P/S) ratio: 6.56, near its 10-year low and 30% below the biotech sector median (9.16). This reflects skepticism about top-line growth, which is misplaced given the CGT tailwinds.
- EV/EBITDA: 25.4x, below peers like Sartorius (30.4x) and Lonza (40.5x).
- Balance sheet: $187.5 million in cash, up 24% year-over-year, with minimal debt.

The high P/E is a red herring. Analysts' 12-month price target of $68.95 (33% above current levels) assumes 7% revenue growth—a conservative bar given the CGT market's 15%+ CAGR.

Risks and the Bottom Line

Risks include margin pressures (due to incentive accruals) and China's regulatory environment. However, Bio-Techne's diversified portfolio—spanning proteins, diagnostics, spatial biology, and CGT tools—buffers it against sector-specific headwinds.

Investment Thesis:
- Buy: For investors with a 12–18-month horizon, the current dip offers entry at a P/S multiple near its decade-low. The Ella and Leo platforms are scaling, and CGT's commercialization wave is just beginning.
- Hold: If you prioritize short-term EPS stability, wait for Q2 2025's margin recovery to be fully reflected in the stock.
- Avoid: Only if you believe the CGT sector's growth is overhyped or Bio-Techne's execution falters in key markets.

Final Take

Bio-Techne is a company at a crossroads: its undervalued metrics and strategic assets position it to capitalize on the CGT boom, yet near-term noise overshadows its long-term promise. For investors willing to look past Q1's soft spots, this dip could be a rare chance to own a leader in a transformative healthcare space at a discount.

The sector's strength isn't going anywhere. Neither should Bio-Techne's role in it—and neither should patient investors' interest.

Disclaimer: This analysis is for informational purposes only and not financial advice. Always consult a professional before making investment decisions.