Embecta Corporation (EMBC) AI Stock Analysis

• Market Cap: $798.91M
• Dividend Yield: 4.39%
• Average Volume (3M): 384.30K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 1.10
• Revenue Growth: -1.47%
• EPS Growth: 18.55%
• Country: US
• Employees: 2,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.12
• Shares Outstanding: 58,485,120
• 10 Day Avg. Volume: 279,831
• 30 Day Avg. Volume: 384,302
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.32
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 2.67
• Enterprise Value/Ebitda: 7.18
• 1Y Price Target: $16.67
• Price Target Upside: 22.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 53 Neutral
• Price Target: $14.00 ▲(2.49% Upside)

Embecta Corporation's overall stock score reflects significant financial challenges, particularly in terms of negative equity and cash flow issues. However, the company shows potential through its strategic initiatives and strong revenue performance highlighted in the earnings call. The stock's valuation is attractive, with a low P/E ratio and high dividend yield providing some support. Technical analysis presents mixed signals, with the stock trading below short-term moving averages but above longer-term ones.

Positive Factors

Revenue Growth

Embecta's strong revenue growth, particularly in the U.S. market, indicates robust demand for its diabetes care products, supporting long-term business sustainability.

Debt Reduction

Effective debt reduction enhances financial flexibility and reduces risk, positioning Embecta for healthier balance sheet management and future investments.

ERP Implementation

Successful ERP implementation and brand transition streamline operations, improve efficiency, and strengthen brand identity, supporting long-term operational excellence.

Negative Factors

Declining China Revenue

Ongoing revenue decline in China due to geopolitical challenges and inventory issues may impact global revenue streams and market diversification efforts.

Gross Margin Decline

Declining gross margins suggest pressure on profitability, potentially affecting long-term financial health and ability to reinvest in business growth.

Fourth Quarter Revenue and Margin Expectations

Projected revenue and margin declines in Q4 may signal operational challenges, affecting short-term financial performance and strategic planning.

Embecta Corporation Business Overview & Revenue Model

Company Description

Embecta 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 Money

Embecta 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 Financial Statement Overview

Summary

Embecta Corporation faces challenges across its financial statements. The income statement reflects shrinking margins and declining revenue growth. The balance sheet is concerning with negative equity and high leverage, while the cash flow statement highlights issues in cash generation and management.

Income Statement

The income statement shows a declining trend in revenue from the previous annual period to the TTM, indicating some challenges in revenue generation. Gross profit margin for TTM is approximately 63.68%, which is healthy, but net profit margin has decreased to around 5.19% due to a significant drop in net income. The company has experienced shrinking EBIT and EBITDA margins, suggesting declining operating efficiency.

Balance Sheet

The balance sheet reveals potential risks with negative stockholders' equity, indicating high leverage and financial instability. The debt-to-equity ratio is not applicable due to negative equity, but the high level of total debt poses a risk. The equity ratio is negative, highlighting that liabilities exceed assets, which could be concerning for creditors and investors.

Cash Flow

Cash flow metrics indicate a reduction in operating cash flow from previous periods. The free cash flow growth rate is negative, showing a decline in cash available after capital expenditures. The operating cash flow to net income ratio is low at 0.76, suggesting inefficiencies in converting income into cash. Overall, cash flow stability seems to be compromised.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.10B	1.12B	1.12B	1.13B	1.17B	1.09B
Gross Profit	692.10M	735.20M	749.90M	774.90M	800.00M	762.60M
EBITDA	257.90M	192.70M	245.40M	400.20M	530.00M	524.00M
Net Income	82.90M	78.30M	70.40M	223.60M	414.80M	427.60M
Balance Sheet
Total Assets	1.16B	1.29B	1.21B	1.09B	788.00M	738.00M
Cash, Cash Equivalents and Short-Term Investments	230.60M	267.50M	326.50M	330.90M	0.00	0.00
Total Debt	1.50B	1.61B	1.66B	1.64B	4.00M	5.00M
Total Liabilities	1.83B	2.02B	2.04B	1.98B	194.00M	166.00M
Stockholders Equity	-669.60M	-738.30M	-821.70M	-891.40M	594.00M	572.00M
Cash Flow
Free Cash Flow	132.30M	19.90M	41.20M	388.20M	417.00M	456.60M
Operating Cash Flow	134.30M	35.70M	67.70M	412.20M	456.00M	498.50M
Investing Cash Flow	-2.00M	-15.80M	-26.50M	-24.00M	-39.00M	-41.90M
Financing Cash Flow	-181.70M	-73.40M	-48.70M	-48.00M	-417.00M	-456.60M

Embecta Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.66
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 13.66 is below the 20-day moving average (MA) of 13.83, below the 50-day MA of 14.27, and above the 200-day MA of 12.82, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 40.12 is Neutral, neither overbought nor oversold. The STOCH value of 16.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EMBC.

Embecta Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIGA	―	$592.90M	7.21	43.61%	―	3.86%	-2.60%
COLL	―	$1.13B	34.75	16.16%	―	22.61%	-63.00%
DVAX	―	$1.20B	-21.62	-9.28%	―	26.66%	-419.55%
EMBC	―	$798.91M	9.50	―	4.39%	-1.47%	18.55%
Sector *	―	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
PCRX	―	$960.66M	-7.67	-15.57%	―	2.25%	-301.59%
ORGO	―	$539.15M	-36.32	-2.64%	―	-4.21%	7.78%

Embecta Corporation Corporate Events

Embecta Corp. Reports Record Revenue and Debt Reduction

Embecta Corporation’s recent earnings call painted a picture of robust financial health and strategic advancement, particularly within the U.S. market. The company showcased its ability to exceed expectations with record revenue figures and significant debt reduction efforts. However, the call also highlighted challenges in the Chinese market and anticipated margin pressures that temper the overall positive sentiment.

Embecta Corporation Reports Strong Q3 2025 Results

Embecta Corporation is a global diabetes care company that focuses on insulin delivery and is working to expand into a diversified medical supplies company. In its third quarter of fiscal 2025, Embecta reported strong financial results, with revenues increasing by 8.4% to $295.5 million compared to the previous year. The company also highlighted the successful implementation of its ERP system and the operationalization of distribution centers in India, marking the end of a complex separation program.