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Embecta Corporation
(NASDAQ:EMBC)
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Rating:51Neutral
Price Target:
$3.50
▲(6.38% Upside)
Action:Reiterated
Date:08/07/26
The score is held back primarily by high financial risk (negative equity and elevated debt) and a materially weakened forward outlook from the earnings call (large cuts to revenue, margin, EPS, and free cash flow guidance). These risks are partially offset by current profitability and cash generation, neutral-to-improving short-term technicals, and a very low P/E that suggests depressed expectations.
Positive Factors
Cash generation
Sustained positive operating and free cash flow shows the core business converts earnings into cash. This durable cash generation supports ongoing debt repayment targets, funds integration of acquisitions, and finances product development or restructuring without immediate reliance on external financing.
Negative Factors
Stressed balance sheet
Persistently negative equity and high absolute debt create structural financial vulnerability. This limits capital flexibility, increases refinancing and covenant sensitivity, and raises funding cost risk over months if operating cash flow softens, constraining strategic options during recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Sustained positive operating and free cash flow shows the core business converts earnings into cash. This durable cash generation supports ongoing debt repayment targets, funds integration of acquisitions, and finances product development or restructuring without immediate reliance on external financing.
Read all positive factors
Embecta Corporation (EMBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$215.95M
Dividend Yield12.64%
Average Volume (3M)2.04M
Price to Earnings (P/E)1.9
Beta (1Y)0.65
Revenue Growth-3.43%
EPS Growth109.76%
CountryUS
Employees1,850
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)1.49
Shares Outstanding59,327,680
10 Day Avg. Volume1,215,714
30 Day Avg. Volume2,041,617
Financial Highlights & Ratios
PEG Ratio0.42
Price to Book (P/B)-1.26
Price to Sales (P/S)0.76
P/FCF Ratio4.51
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$3.00Price Target Upside-8.81% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
EPS Forecast (FY)1.59
Revenue Forecast (FY)$1.02B
Embecta Corporation Business Overview & Revenue Model
Company Description
Embecta Corp. is a medical technology enterprise devoted to enhancing the quality of life and health outcomes for individuals living with diabetes. Its comprehensive product portfolio includes essential tools such as pen needles, syringes, and adv...
How the Company Makes Money
Embecta makes money primarily by selling diabetes-care medical devices to healthcare providers, pharmacies, distributors, and other channel partners in markets where insulin injections are commonly used. Its core revenue stream is the recurring, c...
Embecta Corporation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Dec 01, 2026
Earnings Call Sentiment Negative
The call presents meaningful strategic progress (Owen Mumford acquisition, GLP‑1 B2B traction, brand transition progress, debt repayment and a share buyback authorization) but was dominated by substantial near‑term operational and financial setbacks: large revenue declines (especially in the U.S. and pen needles), sharp margin and EPS guide cuts, a GAAP net loss in the quarter, and material reductions in free cash flow guidance. Management has initiated cost/organization reviews and highlighted actions underway, but the magnitude and persistence of the U.S. share loss and market volume softness create significant short‑term headwinds.Positive Updates
Owen Mumford Acquisition Accelerates Diversification
Acquisition structured as GBP 100M upfront plus up to GBP 50M performance payments; Owen Mumford (OM) had ~GBP 69.4M revenue in FY2025 with ~80% revenue concentrated in U.K. and U.S.; OM brings Aidaptus auto-injector platform (TAM ≈ $2.4B, double‑digit CAGR) and a diversified medical device portfolio. Expected ~4 months of OM contribution to FY2026 revenue (~$30M). Management expects OM to drive medium/long‑term growth, be immaterial to FY2027 adjusted operating income and accretive thereafter, and deliver high single‑digit ROIC by year 4.
Negative Updates
Significant Revenue Decline and U.S. Weakness
Q2 revenue ~ $222M, down 14.4% year‑over‑year as‑reported and down 17.4% on an adjusted constant currency basis. U.S. revenue ~ $95M, down ~29.4% year‑over‑year on an adjusted constant currency basis; management attributes the shortfall primarily to pen needle share loss concentrated at a single customer and broader retail channel volume softness.
Read all updates
Q2-2026 Updates
Positive
Negative
Owen Mumford Acquisition Accelerates Diversification
Acquisition structured as GBP 100M upfront plus up to GBP 50M performance payments; Owen Mumford (OM) had ~GBP 69.4M revenue in FY2025 with ~80% revenue concentrated in U.K. and U.S.; OM brings Aidaptus auto-injector platform (TAM ≈ $2.4B, double‑digit CAGR) and a diversified medical device portfolio. Expected ~4 months of OM contribution to FY2026 revenue (~$30M). Management expects OM to drive medium/long‑term growth, be immaterial to FY2027 adjusted operating income and accretive thereafter, and deliver high single‑digit ROIC by year 4.
Read all positive updates
Company Guidance
Embecta narrowed fiscal 2026 revenue guidance to $1.015–$1.035B (prior $1.071–$1.093B), assuming ~ $30M from the Owen Mumford (OM) close (4 months) and implying an organic midpoint ≈ $995M (≈$75M reduction vs prior low end); Q2 revenue was ~$222M (‑14.4% y/y as‑reported, ‑17.4% adj constant currency), with U.S. ~$95M (‑29.4% adj ccy) and International ~$126M (+2.1% reported, ‑4.1% adj ccy). Product declines (adj ccy) were: pen needles ‑20.4%, syringes ‑14.6%, safety ‑2.3%, contract mfg ‑43.2%; pen needles account for ~70% of the $75M guidance reduction (≈$53M: ~ $25M share loss, ~$20M market volume softness, ~$8M inventory/pricing); syringes ≈$13M, alcohol swabs exit ≈$5M, safety ≈$4M. Q2 GAAP gross profit was $127.8M (57.6% margin) vs $164.1M (63.4% prior year); adjusted gross profit $131.8M (59.4%) vs $165.0M (63.7%). Q2 GAAP operating income $35M (15.8%) vs $62.9M (24.3%); adjusted operating income $48.6M (21.9%) vs $81.4M (31.4%). Q2 GAAP net loss $4.1M, EPS ‑$0.07; adjusted net income $16.1M, EPS $0.27 (prior $40.7M, $0.70). Fiscal guidance: adjusted operating margin cut from 29–30% to 22.25–23.25%; adjusted EPS lowered to $1.55–$1.75 (from $2.80–$3.00), including ~ $0.15 OM dilution and ~ $0.10 from a higher adjusted tax rate (≈23% → ≈28%). Cash and leverage: 6‑month free cash flow ≈$47M, repaid ~$75M of Term Loan B, LTM net leverage ~3x (covenant <4.75x); company still targets ~$150M debt repayment in 2026. Free cash flow guidance is $95–$105M (prior $180–$200M), reflecting ≈$40M of one‑time brand transition/OM cash use. OM terms: upfront £100M plus up to £50M performance payments; FY25 OM revenue ~£69.4M; Aidaptus TAM est. ~$2.4B (double‑digit CAGR); OM expected immaterial to FY27 adjusted operating income and accretive thereafter, with high single‑digit ROIC by year 4. Guidance assumes U.S. share loss and market softness persist.Embecta Corporation Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
18
Very Negative
Cash Flow
63
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.02B | 1.08B | 1.12B | 1.12B | 1.13B | 1.17B |
| Gross Profit | 598.80M | 679.50M | 728.90M | 749.90M | 774.90M | 800.00M |
| EBITDA | 96.20M | 294.70M | 199.00M | 245.40M | 334.50M | 533.00M |
| Net Income | 87.50M | 95.40M | 78.30M | 70.40M | 223.60M | 414.80M |
Balance Sheet | ||||||
| Total Assets | 1.27B | 1.09B | 1.29B | 1.21B | 1.09B | 788.00M |
| Cash, Cash Equivalents and Short-Term Investments | 214.70M | 225.50M | 267.50M | 326.50M | 330.90M | 0.00 |
| Total Debt | 1.49B | 1.43B | 1.61B | 1.64B | 1.64B | 4.10M |
| Total Liabilities | 1.88B | 1.74B | 2.02B | 2.04B | 1.98B | 194.00M |
| Stockholders Equity | -612.70M | -651.20M | -738.30M | -821.70M | -891.40M | 594.00M |
Cash Flow | ||||||
| Free Cash Flow | 164.60M | 182.40M | 19.90M | 41.20M | 388.20M | 417.00M |
| Operating Cash Flow | 174.10M | 191.70M | 35.70M | 67.70M | 412.20M | 456.00M |
| Investing Cash Flow | -127.80M | -9.30M | -15.80M | -26.50M | -24.00M | -39.00M |
| Financing Cash Flow | -62.30M | -226.70M | -73.40M | -48.70M | -48.00M | -417.00M |
Embecta Corporation Technical Analysis
Negative
3.29
Price Trends
3.32
Positive
5.32
Negative
8.50
Negative
Market Momentum
0.06
Negative
50.46
Neutral
56.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMBC, the sentiment is Negative. The current price of 3.29 is below the 20-day moving average (MA) of 3.43, below the 50-day MA of 3.32, and below the 200-day MA of 8.50, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 50.46 is Neutral, neither overbought nor oversold. The STOCH value of 56.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EMBC.
Embecta Corporation Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.04B | 216.30 | 2.13% | ― | 4.57% | ― | |
69 Neutral | $1.15B | 14.93 | 26.74% | ― | 19.88% | 73.61% | |
56 Neutral | $234.54M | 11.42 | 10.62% | ― | -22.07% | -58.28% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $215.95M | 1.91 | -17.48% | 13.98% | -3.43% | 109.76% | |
51 Neutral | $304.96M | -16.21 | -0.07% | ― | 12.19% | 1.97% |
* Healthcare Sector Average
EMBC
Embecta Corporation
3.50
-6.45
-64.81%
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COLL
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ORGO
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2.41
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Embecta Corporation Corporate Events
Business Operations and StrategyM&A Transactions
Embecta Completes Owen Mumford Acquisition to Expand Devices
Positive
May 15, 2026
On May 15, 2026, Embecta completed its acquisition of Owen Mumford Holdings Limited, following a March 19, 2026 purchase agreement with the sellers. Embecta paid £100 million in upfront cash, subject to customary closing adjustments, and may ...
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.