We came across a bullish thesis on Danaher Corporation on Heavy Moat Investments’s Substack. In this article, we will summarize the bulls’ thesis on DHR. Danaher Corporation's share was trading at $185.91 as of September 24th. DHR’s trailing and forward P/E were 39.47 and 21.69 respectively according to Yahoo Finance.
Likoper/Shutterstock.com
Danaher Corporation has long been a central player in the biotech and diagnostics sectors, with acquisitions like Pall and Cytiva positioning it as an essential supplier for biologics, cell therapy, and vaccine production. The pandemic initially accelerated demand for its diagnostic machines, filtration products, and bioprocessing consumables, but this surge created inventory overhangs as biopharma customers stockpiled supplies. By 2022, excess inventories slowed order flow and pressured margins, interrupting the previously steady demand trajectory.
Understanding Danaher’s operations requires a look at its history of disciplined transformation. Founded in 1984, the company built the Danaher Business System, based on continuous improvement principles from Japanese Kaizen techniques, which allowed it to shift from industrial tools to life sciences, diagnostics, and bioprocessing over multiple decades. Strategic spin-offs—Fortive (2016), Envista (2019), and Veralto (2023)—demonstrate its focus on concentrating capital and management on high-growth segments. Today, Danaher is structured around Life Sciences, Diagnostics, and Biotechnology, with the latter emerging as the crown jewel.
Through Cytiva and Pall, the company provides a vertically integrated bioprocessing platform serving biotech firms from research to full-scale manufacturing. Its downstream capabilities, including filtration, chromatography, and fill systems, are particularly strong, benefiting from recurring revenue, high switching costs, and long-term secular growth in biologics, cell, and gene therapies. Danaher’s positioning in later-stage drug production secures enduring revenue streams, as systems specified during early phases are difficult to replace.
Beyond its product portfolio, Danaher’s competitive edge lies in the disciplined application of Danaher Business System, management alignment, and an ability to adapt and reinvent itself, setting the stage for sustained growth in mission-critical biotech infrastructure and diagnostics markets.
Previously we covered a bullish thesis on Danaher Corporation by Best Anchor Stocks in May 2025, which highlighted the company’s bioprocessing recovery, resilient fundamentals, and strong capital discipline through buybacks. The company's stock price has depreciated approximately by 5.4% since our coverage due to inventory overhangs. The thesis still stands as Danaher remains a high-quality compounder. Heavy Moat Investments shares a similar view but emphasizes Danaher Business System, spin-offs, and its integrated bioprocessing platform.
Danaher Corporation is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 115 hedge fund portfolios held DHR at the end of the second quarter which was 117 in the previous quarter. While we acknowledge the potential of DHR 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.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW
Disclosure: None.