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Embecta Corporation (EMBC)
NASDAQ:EMBC
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Embecta Corporation
(NASDAQ:EMBC)
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Rating:57Neutral
Price Target:
$10.50
▼(-0.28% Downside)
Action:ReiteratedDate:02/14/26
The score is driven primarily by mixed fundamentals: strong margins and free cash flow are weighed down by high leverage and negative equity alongside declining revenue. Technicals further pressure the score due to a clear downtrend and weak momentum, while low valuation and a high dividend yield provide meaningful support. Earnings call commentary is constructive on strategy and deleveraging, but near-term guidance is tilted to the low end due to U.S. pricing headwinds.
Positive Factors
Recurring consumables business
Embecta’s core model sells high-frequency consumables (pen needles, syringes) to insulin-treated patients. That creates durable, predictable demand tied to chronic therapy, supporting stable revenue streams, customer relationships, and long-term manufacturing scale advantages across channels.
Strong margins and free cash flow
Sustained gross margin (~63%) and robust TTM FCF (~$206M) indicate business economics that generate internal capital for debt paydown, R&D and reinvestment. Consistent cash conversion enhances resilience through industry cycles and funds strategic initiatives without solely relying on external financing.
Structural growth optionality: GLP-1 & payer access
Progress on GLP-1 co-pack deals and expanded Medicare Part D/formulary access are structural drivers. Co-packaging scale and validated manufacturing (limited incremental capex) create a multi-year revenue runway and diversify end markets, reducing reliance on legacy contract streams.
Negative Factors
High leverage and negative equity
A stressed capital structure with ~$1.42B debt and negative equity constrains flexibility, raises refinancing and covenant risk, and increases sensitivity to interest-cost and cash-flow swings. Even planned debt paydown will take months to materially alter structural risk metrics.
Declining top-line trend
Persistent revenue contraction reduces the margin cushion and limits reinvestment capacity. With FY26 guidance tilted to the low end and geographic/price pressures, revenue weakness could erode operating leverage and make current profitability harder to sustain long term.
Erosion of contract manufacturing and pen-needle volumes
Insourcing by a large customer and geographic pricing/volume pressure represent structural demand loss for contract manufacturing and pen needles. These shifts can permanently reduce revenue diversification and increase reliance on winning new co-pack deals and international growth to replace lost volume.
Embecta Corporation (EMBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$620.62M
Dividend Yield5.03%
Average Volume (3M)764.50K
Price to Earnings (P/E)4.4
Beta (1Y)0.96
Revenue Growth-3.80%
EPS Growth20.20%
CountryUS
Employees2,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.71
Shares Outstanding59,219,852
10 Day Avg. Volume972,860
30 Day Avg. Volume764,498
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 Cap2.98
Enterprise Value/Revenue1.71
Enterprise Value/Gross Profit2.69
Enterprise Value/Ebitda5.27
Forecast
1Y Price Target
$25.00Price Target Upside137.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)2.82
Revenue Forecast (FY)$1.07B
Embecta Corporation Business Overview & Revenue Model
Company DescriptionEmbecta Corp., a medical device company, focuses on the provision of various solutions to enhance the health and wellbeing of people living with diabetes. Its products include pen needles, syringes, and safety devices, as well as digital applications to assist people with managing their diabetes. The company primarily sells its products to wholesalers and distributors in the United States and internationally. Embecta Corp. was founded in 1924 and is based in Parsippany, New Jersey. Embecta Corp.(NasdaqGS:EMBC) operates independently of Becton, Dickinson and Company as of April 1, 2022.
How the Company Makes MoneyEmbecta Corporation generates revenue primarily through the sale of its diabetes care products, including insulin delivery devices and related accessories. The company operates on a business-to-business model, supplying hospitals, clinics, and pharmacies, as well as direct-to-consumer sales in some markets. Key revenue streams include the sale of pen needles, insulin syringes, and infusion sets, with a significant portion of sales derived from long-term contracts and partnerships with healthcare providers and distributors. Additionally, Embecta may benefit from strategic collaborations with technology firms to integrate digital health solutions into its product offerings, thus enhancing value and driving revenue growth.
Embecta Corporation Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 08, 2026
Earnings Call Sentiment Positive
The call conveyed mixed near-term operational challenges—notably U.S. pricing and volume headwinds, pen needle declines, China weakness and a meaningful drop in contract manufacturing—balanced against several strategic and financial positives: strong international growth (EMEA and Latin America), category growth in syringes and safety products, meaningful progress on brand transition and Medicare Part D access, tangible GLP-1 commercial traction with >30 partners and executed purchase orders, continued deleveraging (net leverage ~2.8x) and improved GAAP profitability metrics. Management reaffirmed guidance but signaled being nearer the low end due to U.S. pressures. Overall, the call emphasized execution on multi-year strategic initiatives and financial stability, while acknowledging near-term headwinds that temper upside.Q1-2026 Updates
Positive Updates
Quarterly Revenue (Global) and Currency-Adjusted Change
Embecta reported Q1 FY2026 revenue of approximately $261 million, down 0.3% year-over-year on an as-reported basis and down 2.0% on an adjusted constant currency basis; management noted results were largely in line with expectations and driven by international strength offsetting U.S. headwinds.
International Revenue Growth
International revenue was approximately $130 million, up 8.4% on a reported basis and up 4.6% on an adjusted constant currency basis, driven by strong performance in EMEA and Latin America.
Product Category Strength (Syringes & Safety)
Syringe revenue grew ~5.3% year-over-year and safety product revenue grew ~7.3% year-over-year, with syringe and safety gains led by Latin America, EMEA and U.S. safety improvements.
Gross Profit and Margin Resilience
GAAP gross profit for Q1 was $161.7 million with a GAAP gross margin of 61.9% (prior year 60.0%); adjusted gross profit was $163.5 million with a 62.6% margin (slightly below prior-year adjusted margin of 62.7%). Management cited manufacturing cost improvements and lower manufacturing functional costs as offsets to pricing/mix headwinds.
Operating and Earnings Performance
GAAP operating income improved materially to $83.3 million (31.9% margin) versus $28.7 million (11% margin) last year. Adjusted net income rose to $42.3 million and adjusted diluted EPS increased to $0.71 from $0.65 year-over-year, helped by lower interest expense and tax planning.
Deleveraging and Cash Flow Focus
Generated approximately $17 million in free cash flow in Q1, repaid ~$38 million of debt during the quarter, and reduced last twelve months net leverage to ~2.8x (well below the covenant requirement of <4.75x). Management reiterated a 2026 target to repay ~ $150 million in debt and generate $180–200 million in free cash flow (expect closer to low end).
Brand Transition and Payer Access
More than 95% of U.S. and Canadian SKUs have been transitioned to the Embecta brand. The company added an exclusive Medicare Part D payer contract (effective Jan 2026) and renewed advantage formulary access with the top three Medicare Part D payers, strengthening access in an important senior-patient channel.
GLP-1 Strategy Progress and Commercial Readiness
Actively collaborating with >30 pharmaceutical partners on co-packaging pen needles for generic GLP-1 therapies; over one-third of partners have selected Embecta (contracts or negotiations), several have placed purchase orders, and pen needles are included in multiple partner-managed regulatory submissions. Management reiterated the previously quantified $100M+ GLP-1 opportunity (by 2033) and expects initial generic launches in several markets beginning in 2026.
Portfolio Expansion and Manufacturing Readiness
Market-appropriate pen needles and syringes moved from concept to execution: product designs finalized, production equipment installed, manufacturing validation underway, and progressing toward regulatory submissions and commercial launches without significant incremental capital expected for anticipated GLP-1-related volume.
Negative Updates
U.S. Revenue Decline and Pricing Headwinds
U.S. revenue for the quarter was approximately $131 million and declined ~7.6% year-over-year on an adjusted constant currency basis (Dev cited lower pricing and lower volumes driven by channel and contractual dynamics). Management now expects incremental U.S. pricing pressure and guidance to be closer to the lower end of ranges.
Pen Needle Revenue Weakness
Adjusted constant currency pen needle revenue declined ~4.4% year-over-year, primarily due to U.S. and China dynamics (pricing and volume/mix issues), partially offset by EMEA and Latin America growth.
Contract Manufacturing Decline
Contract manufacturing revenue fell ~16.7% year-over-year as expected, reflecting continued insourcing of these products by Becton Dickinson, creating a notable drag on that revenue stream.
China Market Still a Headwind
China remained a headwind in Q1. Management expects recovery to be weighted to fiscal second half 2026 due to ongoing market dynamics and broader geopolitical/trade issues; first-half China performance will be a drag on year-over-year comparisons.
Adjusted Operating Income and Margin Slightly Pressured
Q1 adjusted operating income decreased slightly to $79.3 million (30.4% margin) from $80.5 million (30.7% margin) a year ago, primarily due to lower adjusted gross profit and higher R&D spending related to new product and strategic projects (market-appropriate products, pen injector development, cannula independence).
Quarterly Free Cash Flow Level and Guidance Caution
Q1 free cash flow was modest at ~$17 million; while management reaffirmed full-year free cash flow guidance of $180–200 million, they expect to be closer to the low end, signaling more constrained near-term cash generation versus mid-point expectations.
Guidance Tilted Toward Lower End
Although 2026 guidance ranges were reaffirmed (revenue flat to -2% adjusted constant currency; as-reported revenue $1.071B–$1.093B; adjusted operating margin 29–30%; adjusted EPS $2.80–$3.00), management said they currently expect to be closer to the lower end of those ranges driven by incremental U.S. headwinds.
Company Guidance
Embecta reaffirmed its FY26 guidance: adjusted constant‑currency revenue flat to down 2% year‑over‑year and as‑reported revenue of -0.9% to +1.1% (implying $1.071–$1.093 billion), reflecting an expected ~1.2% FX tailwind and a ~0.1% Italian payback headwind; adjusted operating margin of 29–30% and adjusted EPS of $2.80–$3.00 (management now expects to be nearer the low end due to incremental U.S. pricing headwinds). Key underlying assumptions include volumes roughly flat (vs prior guidance that implied -50 to -150 bps), manufacturing revenue down ~50 bps, new products contributing ~+50 bps, contract‑manufacturing a ~‑50 bps headwind, and a revenue cadence of ~46% of adjusted dollars in H1 / 54% in H2 (prior year 48/52) with Q1 representing roughly 24% of as‑reported revenue (previously modeled at $257–$262M). On the balance sheet and cash flow, Embecta expects to repay approximately $150M of debt in FY26 (Q1 repay ~$38M), generate $180–$200M of free cash flow (closer to the low end; Q1 FCF ~$17M), and entered the year with LTM net leverage of ~2.8x (vs covenant <4.75x).Embecta Corporation Financial Statement Overview
Summary
Solid profitability and cash generation (TTM net margin ~13%, FCF ~$206M) are meaningful positives, but they are offset by declining TTM revenue (-6.5%) and a stressed capital structure with high debt (~$1.42B) and negative stockholders’ equity (~-$613M), which elevates financial risk.Income Statement
TTM (Trailing-Twelve-Months) revenue declined (-6.5%), following modest declines in recent annual periods, signaling a soft top-line backdrop. Profitability is a clear strength: TTM gross margin is ~63% and net margin is ~13%, with operating profitability improving versus the last annual period (net income up to $139.5M TTM from $95.4M). Offsetting this, margins are still below the stronger levels seen in 2022, and revenue contraction increases the risk that earnings gains are harder to sustain.62
Positive
Balance Sheet
Leverage is a key concern: total debt is ~$1.42B against negative stockholders’ equity (about -$613M TTM), which reduces balance-sheet flexibility and raises financial risk. While total debt has edged down versus 2023–2024 levels, equity remains meaningfully negative and returns on equity are negative, indicating the capital structure is still strained despite improved earnings.28
Negative
Cash Flow
Cash generation is a notable positive. TTM operating cash flow is ~$214M and free cash flow is ~$206M, with strong free-cash-flow growth (about +12.8%). Free cash flow is roughly in line with net income (about 0.96x), suggesting earnings quality is decent. A watch item is that cash flow coverage versus earnings is not consistently strong across years (very weak in 2023–2024), implying potential volatility even though the latest TTM performance is solid.71
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.08B | 1.08B | 1.12B | 1.12B | 1.13B | 1.17B |
| Gross Profit | 688.10M | 679.50M | 728.90M | 749.90M | 774.90M | 800.00M |
| EBITDA | 351.50M | 294.70M | 199.00M | 245.40M | 334.50M | 533.00M |
| Net Income | 139.50M | 95.40M | 78.30M | 70.40M | 223.60M | 414.80M |
Balance Sheet | ||||||
| Total Assets | 1.06B | 1.09B | 1.29B | 1.21B | 1.09B | 788.00M |
| Cash, Cash Equivalents and Short-Term Investments | 204.40M | 225.50M | 267.50M | 326.50M | 330.90M | 0.00 |
| Total Debt | 1.42B | 1.43B | 1.61B | 1.64B | 1.64B | 0.00 |
| Total Liabilities | 1.68B | 1.74B | 2.02B | 2.04B | 1.98B | 194.00M |
| Stockholders Equity | -613.10M | -650.60M | -738.30M | -821.70M | -891.40M | 594.00M |
Cash Flow | ||||||
| Free Cash Flow | 205.80M | 182.40M | 19.90M | 41.20M | 388.20M | 417.00M |
| Operating Cash Flow | 214.20M | 191.70M | 35.70M | 67.70M | 412.20M | 456.00M |
| Investing Cash Flow | 1.70M | -9.30M | -15.80M | -26.50M | -24.00M | -39.00M |
| Financing Cash Flow | -233.10M | -226.70M | -73.40M | -48.70M | -48.00M | -417.00M |
Embecta Corporation Technical Analysis
Positive
10.53
Price Trends
11.47
Negative
12.48
Negative
12.06
Negative
Market Momentum
-0.36
Negative
47.10
Neutral
50.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMBC, the sentiment is Positive. The current price of 10.53 is above the 20-day moving average (MA) of 10.53, below the 50-day MA of 11.47, and below the 200-day MA of 12.06, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 47.10 is Neutral, neither overbought nor oversold. The STOCH value of 50.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $478.36M | 6.50 | 39.94% | ― | -0.85% | -13.50% | |
72 Outperform | $1.43B | 28.12 | 22.96% | ― | 26.34% | -32.79% | |
64 Neutral | $990.35M | 51.96 | 2.90% | ― | 3.14% | ― | |
57 Neutral | $620.62M | 4.42 | ― | 5.03% | -3.80% | 20.20% | |
52 Neutral | $487.34M | -40.57 | 0.30% | ― | 2.24% | -67.56% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
EMBC
Embecta Corporation
10.73
-2.36
-18.03%
PCRX
Pacira Pharmaceuticals
23.22
-2.03
-8.04%
SIGA
SIGA Technologies
6.75
1.60
31.07%
COLL
Collegium Pharmaceutical
45.00
15.81
54.16%
ORGO
Organogenesis Holdings
3.99
0.81
25.47%
Embecta Corporation Corporate Events
Executive/Board ChangesShareholder Meetings
Embecta shareholders back board, pay, and equity plan
Positive
Feb 13, 2026
At its Annual Meeting of Stockholders held on February 11, 2026, Embecta Corp. shareholders elected all seven board nominees, including CEO Devdatt Kurdikar and chair Carrie L. Anderson, to one-year terms ending at the 2027 annual meeting. Investors also ratified Ernst & Young LLP as the independent auditor for fiscal 2026, signaling support for the company’s financial oversight.
Stockholders approved on an advisory basis the compensation of Embecta’s named executive officers, reinforcing backing for current leadership’s pay structure. They additionally endorsed an amendment to the 2022 Employee and Director Equity-Based Compensation Plan, a move that bolsters Embecta’s ability to use equity incentives to retain talent and align management and director interests with shareholder value.
The most recent analyst rating on (EMBC) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Embecta Corporation stock, see the EMBC Stock Forecast page.
Business Operations and StrategyExecutive/Board Changes
Embecta Corp Announces Board Resignation and Transition
Neutral
Nov 17, 2025
On November 17, 2025, Embecta Corp. announced the resignation of David A. Albritton from its Board of Directors, effective immediately, and LTG (Ret.) David F. Melcher’s decision not to stand for re-election at the 2026 annual meeting. These changes are part of Embecta’s strategic transition from its initial standup phase to a growth-focused phase. The Board plans to appoint Devdatt Kurdikar as Chairman and Dr. Claire Pomeroy as Lead Independent Director, reflecting a strategic realignment to prioritize customer, employee, and shareholder needs.
The most recent analyst rating on (EMBC) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Embecta Corporation stock, see the EMBC 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.