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Embecta Corporation (EMBC)
NASDAQ:EMBC
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Embecta Corporation
(NASDAQ:EMBC)
Rating:49Neutral
Price Target:
$9.00
▼(-12.20%Downside)
Positive Factors
Debt Management
Management has a high degree of confidence in achieving the $600M free cash flow target, which will allow the company to pay down debt and reduce interest expenses.
Strategic Initiatives
Embecta is planning several strategic initiatives to transition into a broader medical supplies company and help accelerate growth beyond 2028.
Negative Factors
Revenue Decline
Total sales declined by 9.8% year-over-year, highlighting a challenging sales environment for the company.
Store Closures
EMBC calling out major US pharmacy retailer closing stores leading to reductions of inventory levels, which will impact revenues.
Embecta Corporation (EMBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$599.04M
Dividend Yield5.85%
Average Volume (3M)749.22K
Price to Earnings (P/E)11.3
Beta (1Y)0.97
Revenue Growth-4.68%
EPS Growth-25.40%
CountryUS
Employees2,000
SectorHealthcare
Sector Strength40
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.70
Shares Outstanding58,442,510
10 Day Avg. Volume833,351
30 Day Avg. Volume749,223
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)-1.84
Price to Sales (P/S)0.00
P/FCF Ratio4.23
Enterprise Value/Market Cap4.93
Enterprise Value/Revenue0.67
Enterprise Value/Gross Profit4.31
Enterprise Value/Ebitda3.29
Forecast
1Y Price Target
$17.75Price Target Upside73.17% Upside
Rating ConsensusHold
Number of Analyst Covering4
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, particularly insulin delivery systems, which include insulin pens, needles, and other related accessories. The company leverages its strong research and development capabilities to innovate and improve its product offerings, ensuring they meet the evolving needs of consumers and healthcare providers. Additionally, Embecta benefits from strategic partnerships and collaborations with healthcare organizations and pharmaceutical companies to expand its market reach and enhance its product distribution. Revenue is also supported through long-term contracts with healthcare institutions and distribution networks globally, ensuring a steady stream of income from its established customer base.
Embecta Corporation Earnings Call Summary
Earnings Call Date:May 09, 2025
(Q2-2025)
| % Change Since: -21.87%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
While Embecta is making significant progress in debt reduction, employee engagement, and strategic partnerships for product expansion, the company faces challenges with declining revenues, particularly in the US and international markets, and tariff impacts on margins. The company has adjusted its revenue guidance downward but is implementing cost-saving measures to mitigate these issues.Q2-2025 Updates
Positive Updates
Exceeding Revenue Expectations
Second quarter revenue totaled $259 million, surpassing expectations of $250 million to $255 million due to strong constant currency performance and favorable foreign exchange rates.
Debt Reduction Progress
Embecta made a $27 million principal payment on its Term Loan B facility during the quarter and has reduced debt by approximately $60 million year-to-date, on track to achieve the goal of reducing debt by $110 million in fiscal 2025.
Employee Engagement and Recognition
Conducted a company-wide employee engagement survey, resulting in Embecta being certified as a Great Place to Work for 2025 in eight countries.
Strategic Partnerships in Product Expansion
Received several purchase orders from generic manufacturers to co-package pen needles, expanding into the generic GLP-1 drug market.
Operational and Financial Efficiency
Initiated a restructuring plan expected to save $7 million to $8 million in pre-tax costs during the second half of fiscal 2025.
Negative Updates
Decline in Revenue
Second quarter revenue declined by 9.8% year-over-year on an as-reported basis and 7.7% on an adjusted constant currency basis.
US Revenue and Inventory Issues
US revenue declined by 8.4% year-over-year on an adjusted constant currency basis due to timing of price increases and customer inventory adjustments.
International Revenue Decline
International revenue declined by 7.0% on an adjusted constant currency basis due to ERP-related inventory builds in the prior year.
Tariff Impacts on Margins
Adjusted gross margins affected by an estimated 25 basis points due to tariffs, primarily from US-China trade dynamics.
Lowered Revenue Guidance
Lowered full-year 2025 constant currency revenue outlook due to lower projected US volumes from customer inventory reductions tied to store closures.
Company Guidance
During Embecta Corp.'s fiscal second quarter 2025 earnings call, detailed financial guidance was provided for the remainder of the fiscal year. The company reported second-quarter revenue of $259 million, surpassing the previous guidance range of $250 million to $255 million, largely due to better than anticipated foreign exchange rates and constant currency performance. For fiscal year 2025, Embecta aims to reduce debt by approximately $110 million, with $60 million already achieved year-to-date. Despite challenges such as anticipated lower US volumes due to store closures at a specific retail pharmacy customer, the company is maintaining its as-reported revenue guidance due to favorable foreign exchange movements. Adjusted gross margin guidance was slightly lowered to account for incremental tariffs and reduced revenue expectations, yet adjusted operating and EBITDA margin guidance was raised due to effective cost management and restructuring initiatives. The restructuring plan, aimed at driving efficiencies, is expected to result in cost savings of $7 million to $8 million in the second half of fiscal 2025, with annualized savings projected around $15 million. The company remains committed to its strategic priorities of strengthening its core business, expanding its product portfolio, and increasing financial flexibility.Embecta Corporation Financial Statement Overview
Summary
Embecta Corporation faces significant 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. The company may need strategic adjustments to improve financial health and stability.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.55
Neutral
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.40
Negative
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.30
Negative
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.08B | 1.12B | 1.12B | 1.13B | 1.17B | 1.09B |
| Gross Profit | 685.10M | 735.20M | 749.90M | 774.90M | 800.00M | 762.60M |
| EBITDA | 201.90M | 199.00M | 245.40M | 400.20M | 530.00M | 524.00M |
| Net Income | 52.10M | 78.30M | 70.40M | 223.60M | 414.80M | 427.60M |
Balance Sheet | ||||||
| Total Assets | 1.12B | 1.29B | 1.21B | 1.09B | 788.00M | 738.00M |
| Cash, Cash Equivalents and Short-Term Investments | 209.30M | 267.50M | 326.50M | 330.90M | 0.00 | 0.00 |
| Total Debt | 1.55B | 1.61B | 1.64B | 1.64B | 4.00M | 5.00M |
| Total Liabilities | 1.86B | 2.02B | 2.04B | 1.98B | 194.00M | 166.00M |
| Stockholders Equity | -736.20M | -738.30M | -821.70M | -891.40M | 594.00M | 572.00M |
Cash Flow | ||||||
| Free Cash Flow | 39.70M | 19.90M | 41.20M | 388.20M | 417.00M | 456.60M |
| Operating Cash Flow | 51.00M | 35.70M | 67.70M | 412.20M | 456.00M | 498.50M |
| Investing Cash Flow | -11.30M | -15.80M | -26.50M | -24.00M | -39.00M | -41.90M |
| Financing Cash Flow | -130.60M | -73.40M | -48.70M | -48.00M | -417.00M | -456.60M |
Embecta Corporation Technical Analysis
Neutral
10.25
Price Trends
10.91
Negative
11.98
Negative
14.21
Negative
Market Momentum
-0.22
Negative
51.00
Neutral
90.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMBC, the sentiment is Neutral. The current price of 10.25 is above the 20-day moving average (MA) of 9.92, below the 50-day MA of 10.91, and below the 200-day MA of 14.21, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 51.00 is Neutral, neither overbought nor oversold. The STOCH value of 90.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EMBC.
Embecta Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.41B | ― | -5.19% | ― | 30.26% | -173.36% | |
70 Outperform | $1.80B | 29.04 | 6.32% | ― | 11.82% | ― | |
63 Neutral | $853.63M | ― | -34.65% | ― | 252.64% | 85.10% | |
60 Neutral | $1.12B | ― | -37.23% | ― | 53.49% | 33.18% | |
60 Neutral | HK$15.31B | 5.72 | -7.43% | 4.61% | 11.60% | -21.06% | |
49 Neutral | $599.04M | 11.30 | -10.61% | 5.85% | -4.68% | -25.40% | |
48 Neutral | $1.22B | 64.45 | -10.45% | ― | 24.76% | -783.38% |
* Healthcare Sector Average
Performance Comparison
EMBC
Embecta Corporation
10.25
-0.73
-6.65%
DVAX
Dynavax
10.16
-1.09
-9.69%
AVDL
Avadel Pharmaceuticals
8.93
-5.85
-39.58%
SUPN
Supernus Pharmaceuticals
31.98
5.95
22.86%
ANIP
ANI Pharmaceuticals
65.28
3.84
6.25%
HROW
Harrow Health
30.57
8.45
38.20%
Embecta Corporation Corporate Events
Business Operations and StrategyFinancial Disclosures
Embecta Unveils Strategy at Analyst and Investor Day
Positive
May 22, 2025
On May 22, 2025, Embecta Corp. hosted its first Analyst and Investor Day to present its phased strategy for value creation and long-term financial plans. The company aims to strengthen its core insulin business, expand its product portfolio, and increase financial flexibility. Embecta reaffirmed its fiscal year 2025 financial guidance and announced a long-range financial plan through fiscal 2028, focusing on maintaining revenue, achieving an adjusted operating margin, and reducing debt. These initiatives are designed to position Embecta for sustainable growth in the evolving healthcare landscape.
The most recent analyst rating on (EMBC) stock is a Sell with a $20.00 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.