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Sonic Healthcare Limited (AU:SHL)
ASX:SHL
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Sonic Healthcare Limited
(Sydney:SHL)
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Rating:64Neutral
Price Target:
AU$23.00
▲(10.05% Upside)
Sonic Healthcare Limited's overall stock score is driven by its solid financial performance and positive earnings call guidance. However, technical indicators suggest bearish momentum, and valuation metrics are moderate. The mixed outlook from the earnings call, with both positive growth prospects and notable challenges, also influences the score.
Sonic Healthcare Limited (SHL) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$10.27B
Dividend Yield5.12%
Average Volume (3M)1.62M
Price to Earnings (P/E)19.4
Beta (1Y)0.84
Revenue Growth9.44%
EPS Growth-0.37%
CountryAU
Employees42,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.57
Shares Outstanding494,237,950
10 Day Avg. Volume1,694,025
30 Day Avg. Volume1,619,425
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)1.55
Price to Sales (P/S)1.34
P/FCF Ratio13.42
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$27.41Price Target Upside31.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sonic Healthcare Limited Business Overview & Revenue Model
Company DescriptionSonic Healthcare Limited (SHL) is a global healthcare company headquartered in Sydney, Australia, specializing in medical diagnostics and pathology services. Operating in various sectors including laboratory medicine, radiology, and primary care, SHL provides comprehensive diagnostic testing services to hospitals, general practitioners, and patients. The company is recognized for its commitment to quality and innovation in healthcare, offering a wide range of services that include blood testing, imaging, and other diagnostic assessments.
How the Company Makes MoneySonic Healthcare generates revenue primarily through its extensive portfolio of diagnostic services, which includes pathology, radiology, and other medical testing. The company earns money by charging healthcare providers and patients for these services, often operating on a fee-for-service model. Key revenue streams include pathology services, which involve the analysis of blood and other samples, and radiology services, which encompass imaging techniques such as X-rays and MRIs. Additionally, Sonic Healthcare benefits from partnerships with hospitals, clinics, and healthcare networks, which provide a steady stream of clients and enhance service delivery. The company also leverages economies of scale and operational efficiencies to optimize its cost structure, thereby improving profitability. Furthermore, SHL's international presence allows it to tap into diverse healthcare markets, contributing to its overall financial performance.
Sonic Healthcare Limited Earnings Call Summary
Earnings Call Date:Aug 20, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 23, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were significant achievements in revenue growth, strategic acquisitions, and positive future guidance, these were balanced by challenges such as revenue declines in the U.S., potential regulatory impacts, and increased interest expenses.Q4-2025 Updates
Positive Updates
Revenue Growth
Revenue came in at $9.645 billion, up 8% on the prior year. EBITDA also increased by 8% to $1.725 billion, with a net profit of $514 million, up 7%.
Strong Cash Generation
Cash generation was just shy of $1.3 billion, demonstrating strong operational cash flow.
Positive Outlook for FY 2026
Guidance for FY 2026 indicates EBITDA growth of up to 13% on FY 2025, equating to about 16% growth using current exchange rates.
Strategic Acquisitions
Successful acquisitions in Switzerland and Germany, particularly the LADR acquisition, are expected to drive future growth.
New Contracts and Expansions
Secured new contracts in the U.S. and Australia, including a major payer contract in New Jersey and hospital contracts in Australia.
Negative Updates
U.S. Revenue Decrease
Statutory growth in the U.S.A. was negative 2%, with organic growth at minus 1% on a constant currency basis due to the loss of a payer contract and cyber attack disruptions.
Impact of Regulatory Changes in Germany
Organic growth in Germany was impacted by changes to the minimum KV quota for statutory insurance fees, leading to a reduction by approximately 1% annually.
Anatomical Pathology Challenges
The anatomical pathology segment in the U.S. faced difficulties due to pathologist retirements and disruptions from a cyber attack.
Interest Expense Increase
Interest expense is expected to increase by 15% to 20% on a constant currency basis due to recent acquisitions.
Potential Regulatory Risks
Potential PAMA fee cut in the U.S. could affect future revenues, although it is expected to be deferred again.
Company Guidance
In the Sonic Healthcare FY 2025 earnings call, CEO Dr. Colin Goldschmidt highlighted several key metrics and projections. The company reported FY 2025 revenue of $9.645 billion, up 8% year-over-year, with an EBITDA of $1.725 billion, also up 8%. Net profit increased 7% to $514 million, while earnings per share were $0.1067. Organic revenue growth was 5%, and the EBITDA margin expanded by 40 basis points. For FY 2026, Sonic Healthcare provided guidance for EBITDA in the range of $1.87 billion to $1.95 billion on a constant currency basis, translating to $1.94 billion to $2.02 billion using current exchange rates. This guidance reflects a projected EBITDA growth of up to 13% on FY 2025 results, equating to approximately 16% growth at current exchange rates. The company expects EPS growth of up to 19% and plans to manage interest expense increases of 15% to 20% due to acquisitions. Sonic Healthcare maintained its progressive dividend strategy, with total dividends for the year at $1.07 per share, up 1% from the previous year.Sonic Healthcare Limited Financial Statement Overview
Summary
Sonic Healthcare Limited shows solid financial health with consistent revenue growth and strong cash flow generation. Despite increased leverage and a slight decline in net profit margin and return on equity, the company's financial position remains robust.Income Statement
Sonic Healthcare Limited has demonstrated consistent revenue growth, with a 3.38% increase in the latest year. The gross profit margin has improved to 33.05%, indicating efficient cost management. However, the net profit margin has slightly decreased to 5.32%, suggesting some pressure on net earnings. The EBIT margin remains stable at 9.71%, reflecting solid operational efficiency.72
Positive
Balance Sheet
The company's debt-to-equity ratio has increased to 0.62, indicating a higher reliance on debt financing. Return on equity has slightly decreased to 6.17%, which may concern investors looking for high returns. However, the equity ratio remains robust at 51.87%, showing a strong equity base relative to total assets.68
Positive
Cash Flow
Sonic Healthcare's free cash flow has grown by 16.63%, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is 2.53, indicating efficient conversion of income into cash. The free cash flow to net income ratio is 0.74, reflecting a healthy cash flow position relative to net earnings.75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.65B | 9.65B | 8.93B | 8.14B | 9.31B | 8.75B |
| Gross Profit | 3.19B | 3.19B | 2.33B | 6.87B | 3.41B | 7.14B |
| EBITDA | 1.24B | 1.24B | 1.66B | 1.72B | 2.83B | 2.56B |
| Net Income | 513.60M | 513.60M | 511.09M | 684.98M | 1.46B | 1.32B |
Balance Sheet | ||||||
| Total Assets | 16.05B | 16.05B | 14.83B | 13.56B | 13.11B | 12.27B |
| Cash, Cash Equivalents and Short-Term Investments | 673.77M | 673.77M | 645.00M | 797.99M | 780.00M | 899.83M |
| Total Debt | 5.17B | 5.17B | 4.52B | 3.10B | 3.01B | 3.23B |
| Total Liabilities | 7.58B | 7.58B | 6.75B | 5.64B | 5.68B | 5.77B |
| Stockholders Equity | 8.32B | 8.32B | 7.92B | 7.74B | 7.27B | 6.38B |
Cash Flow | ||||||
| Free Cash Flow | 960.55M | 960.55M | 492.01M | 974.02M | 1.85B | 1.68B |
| Operating Cash Flow | 1.30B | 1.30B | 1.07B | 1.47B | 2.23B | 2.04B |
| Investing Cash Flow | -577.62M | -577.62M | -1.81B | -580.04M | -989.18M | -386.75M |
| Financing Cash Flow | -735.93M | -735.93M | 592.41M | -911.51M | -1.35B | -1.95B |
Sonic Healthcare Limited Technical Analysis
Negative
20.90
Price Trends
21.77
Negative
24.03
Negative
24.94
Negative
Market Momentum
-0.32
Positive
39.01
Neutral
12.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SHL, the sentiment is Negative. The current price of 20.9 is below the 20-day moving average (MA) of 21.23, below the 50-day MA of 21.77, and below the 200-day MA of 24.94, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 39.01 is Neutral, neither overbought nor oversold. The STOCH value of 12.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:SHL.
Sonic Healthcare Limited Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | AU$524.72M | 15.63 | 18.59% | 4.79% | 6.73% | 37.16% | |
68 Neutral | AU$268.85M | 10.75 | 10.25% | 7.61% | 6.65% | ― | |
64 Neutral | AU$10.27B | 19.43 | 6.32% | 5.12% | 9.44% | -0.37% | |
55 Neutral | AU$977.07M | 172.37 | 0.94% | 2.60% | 33.54% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | €635.37M | -1.21 | -67.21% | ― | -23.02% | 33.11% | |
48 Neutral | AU$72.68M | -3.54 | -36.16% | ― | 62.81% | 16.37% |
* Healthcare Sector Average
AU:SHL
Sonic Healthcare Limited
20.90
-5.18
-19.86%
AU:HLS
Healius Limited
0.87
-0.29
-24.74%
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Genetic Signatures Ltd.
0.30
-0.42
-58.74%
AU:IDX
Integral Diagnostics Ltd.
2.47
-0.57
-18.75%
AU:ACL
Australian Clinical Labs Ltd
2.55
-0.91
-26.30%
AU:MVF
Monash IVF Group Ltd
0.67
-0.46
-40.92%
Sonic Healthcare Limited Corporate Events
Sonic Healthcare Completes Acquisition of LADR Laboratory Group
Jul 1, 2025
Sonic Healthcare Limited has successfully completed the acquisition of LADR Laboratory Group Dr. Kramer & Colleagues, as announced earlier. This acquisition is expected to strengthen Sonic’s market position in the diagnostic services sector, potentially enhancing its operational capabilities and offering new growth opportunities.
The most recent analyst rating on (AU:SHL) stock is a Hold with a A$30.80 price target. To see the full list of analyst forecasts on Sonic Healthcare Limited stock, see the AU:SHL Stock Forecast page.
Sonic Healthcare Limited Announces Quotation of New Securities on ASX
Jul 1, 2025
Sonic Healthcare Limited announced the quotation of 13,833,980 ordinary fully paid securities on the Australian Securities Exchange (ASX) as part of a previously disclosed transaction. This move is expected to enhance the company’s financial flexibility and potentially improve its market position, benefiting stakeholders by increasing the liquidity of its shares.
The most recent analyst rating on (AU:SHL) stock is a Hold with a A$25.40 price target. To see the full list of analyst forecasts on Sonic Healthcare Limited stock, see the AU:SHL Stock Forecast page.
Sonic Healthcare Limited Announces Cessation of Securities
Jun 16, 2025
Sonic Healthcare Limited announced the cessation of 20,000 securities, identified by the ASX security code SHLAK, as of June 16, 2025. This cessation of securities may impact the company’s capital structure and could have implications for stakeholders, reflecting a strategic decision in managing their financial operations.
The most recent analyst rating on (AU:SHL) stock is a Hold with a A$25.40 price target. To see the full list of analyst forecasts on Sonic Healthcare Limited stock, see the AU:SHL Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.