Embecta Corporation (EMBC)
NASDAQ:EMBC
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Embecta Corporation
(NASDAQ:EMBC)
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Rating:44Neutral
Price Target:
$3.00
▼(-69.33% Downside)
Action:Reiterated
Date:05/15/26
The score is held down primarily by balance-sheet risk (high leverage and negative equity), sharply weaker near-term outlook from the earnings call (material guidance cuts and U.S. share loss), and strong negative technical trend signals. These are only partly offset by solid recent cash generation and longer-term strategic upside from the Owen Mumford acquisition and GLP-1 device initiatives.
Positive Factors
Consumables-based recurring revenue model
A consumables model (pen needles, syringes) creates persistent, repeat demand that smooths revenue over time versus one-off sales. This supports stable unit volumes, predictable reorder cycles, and durable channel relationships with wholesalers, pharmacies and institutions, aiding long-term cash visibility.
Negative Factors
High leverage and negative equity
A stressed capital structure with large debt and negative equity materially limits financial flexibility. It raises refinancing and covenant sensitivity, constrains ability to fund growth or weather prolonged market weakness, and increases priority of cash used for deleveraging over reinvestment or dividends.
Read all positive and negative factors
Positive Factors
Negative Factors
Consumables-based recurring revenue model
A consumables model (pen needles, syringes) creates persistent, repeat demand that smooths revenue over time versus one-off sales. This supports stable unit volumes, predictable reorder cycles, and durable channel relationships with wholesalers, pharmacies and institutions, aiding long-term cash visibility.
Read all positive factors
Embecta Corporation (EMBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$196.97M
Dividend Yield5.03%
Average Volume (3M)2.72M
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth-3.43%
EPS Growth109.76%
CountryUS
Employees2,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)1.91
Shares Outstanding59,327,680
10 Day Avg. Volume3,300,754
30 Day Avg. Volume2,718,237
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 Cap6.95
Enterprise Value/Revenue1.31
Enterprise Value/Gross Profit2.10
Enterprise Value/Ebitda4.11
Forecast
1Y Price Target
$4.00Price Target Upside-59.10% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)1.57
Revenue Forecast (FY)$1.02B
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 applicati...
How the Company Makes Money
Embecta primarily makes money by selling diabetes injection devices—most notably pen needles and insulin syringes—at recurring volume to customers who need continuous replenishment of these consumable products. Revenue is generated from the commer...
Embecta Corporation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 07, 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
55
Neutral
Balance Sheet
18
Very Negative
Cash Flow
64
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.04B | 1.08B | 1.12B | 1.12B | 1.13B | 1.17B |
| Gross Profit | 651.80M | 679.50M | 728.90M | 749.90M | 774.90M | 800.00M |
| EBITDA | 333.00M | 294.70M | 199.00M | 245.40M | 334.50M | 533.00M |
| Net Income | 111.90M | 95.40M | 78.30M | 70.40M | 223.60M | 414.80M |
Balance Sheet | ||||||
| Total Assets | 1.03B | 1.09B | 1.29B | 1.21B | 1.09B | 788.00M |
| Cash, Cash Equivalents and Short-Term Investments | 184.90M | 225.50M | 267.50M | 326.50M | 330.90M | 0.00 |
| Total Debt | 1.36B | 1.43B | 1.61B | 1.64B | 1.64B | 0.00 |
| Total Liabilities | 1.66B | 1.74B | 2.02B | 2.04B | 1.98B | 194.00M |
| Stockholders Equity | -626.10M | -650.60M | -738.30M | -821.70M | -891.40M | 594.00M |
Cash Flow | ||||||
| Free Cash Flow | 204.70M | 182.40M | 19.90M | 41.20M | 388.20M | 417.00M |
| Operating Cash Flow | 213.50M | 191.70M | 35.70M | 67.70M | 412.20M | 456.00M |
| Investing Cash Flow | 1.30M | -9.30M | -15.80M | -26.50M | -24.00M | -39.00M |
| Financing Cash Flow | -237.30M | -226.70M | -73.40M | -48.70M | -48.00M | -417.00M |
Embecta Corporation Technical Analysis
Negative
9.78
Price Trends
7.45
Negative
9.10
Negative
11.16
Negative
Market Momentum
-1.49
Positive
21.98
Positive
54.57
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 9.78 is above the 20-day moving average (MA) of 5.06, above the 50-day MA of 7.45, and below the 200-day MA of 11.16, indicating a bearish trend. The MACD of -1.49 indicates Positive momentum. The RSI at 21.98 is Positive, neither overbought nor oversold. The STOCH value of 54.57 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 | $918.47M | 78.40 | 0.73% | ― | 4.57% | ― | |
69 Neutral | $1.11B | 18.30 | 26.74% | ― | 19.88% | 73.61% | |
56 Neutral | $335.67M | -27.74 | 10.62% | ― | -22.07% | -58.28% | |
53 Neutral | $342.27M | ― | -0.07% | ― | 12.19% | 1.97% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
44 Neutral | $196.97M | ― | -17.49% | 5.03% | -3.43% | 109.76% |
* Healthcare Sector Average
EMBC
Embecta Corporation
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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 ...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Embecta to Acquire Owen Mumford, Expanding Drug-Delivery Portfolio
Positive
Mar 20, 2026
On March 19, 2026, Embecta announced a definitive agreement to acquire privately held U.K. medical device maker Owen Mumford Holdings Limited in a deal valued at up to £150 million. The transaction, unanimously approved by Embecta’s boa...
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.