Embecta Corporation (EMBC) AI Stock Analysis

• Market Cap: $808.85M
• Dividend Yield: 4.17%
• Average Volume (3M): 655.94K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.13
• Revenue Growth: -1.47%
• EPS Growth: 18.55%
• Country: US
• Employees: 2,000
• Sector: Healthcare
• Sector Strength: 48
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.12
• Shares Outstanding: 58,485,120
• 10 Day Avg. Volume: 857,570
• 30 Day Avg. Volume: 655,937
• 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: 2.29
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 2.67
• Enterprise Value/Ebitda: 7.18
• 1Y Price Target: $16.67
• Price Target Upside: 15.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 64 Neutral
• Price Target: $14.50 ▲(0.83% Upside)

Embecta's overall stock score is primarily influenced by its financial challenges, which weigh heavily on its performance. However, strong technical indicators and attractive valuation metrics provide a positive counterbalance. The earnings call and corporate events add further optimism, but the financial instability remains a significant concern.

Positive Factors

Earnings

Embecta reported a F2Q that beat on all key metrics, including revenue, adjusted gross margins, and EPS, which all came in ahead of expectations.

Financial Performance

The company's EBITDA and EPS came in comfortably ahead of expectations, indicating strong financial performance.

Strategic Initiatives

Embecta is planning several strategic initiatives to transition into a broader medical supplies company and help accelerate growth beyond 2028.

Negative Factors

Retail Pharmacy Impact

EMBC reduced the full year revenue guide due to lower volumes at a specific U.S. retail pharmacy customer that is closing stores.

Revenue Guidance

F4Q revenue guide implies a sequential stepdown due to the timing of distributor orders, expected reversal of stocking benefits, and potential geopolitical tensions affecting revenue from China.

Sales Decline

Total sales declined by 9.8% year-over-year, highlighting a challenging sales environment for the company.

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, 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 Financial Statement Overview

Summary

Embecta Corporation faces significant challenges across its financial statements. The income statement shows declining revenue and shrinking margins. The balance sheet is concerning with negative equity and high leverage, while cash flow metrics indicate inefficiencies 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: Positive
• Last Price: 14.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 14.38 is above the 20-day moving average (MA) of 12.08, above the 50-day MA of 10.95, and above the 200-day MA of 13.80, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 73.60 is Negative, neither overbought nor oversold. The STOCH value of 81.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EMBC.

Embecta Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUPN	76 Outperform	$2.36B	37.30	6.38%	―	5.55%	1145.24%
AVDL	66 Neutral	$1.44B	―	-3.63%	―	132.35%	97.34%
ANIP	66 Neutral	$1.98B	―	-2.82%	―	38.68%	-160.14%
EMBC	64 Neutral	$808.85M	9.67	-10.61%	4.17%	-1.47%	18.55%
DVAX	54 Neutral	$1.28B	64.45	-9.28%	―	26.66%	-419.55%
Sector *	54 Neutral	€4.21B	12.58	-36.14%	2.43%	22.52%	-22.08%
HROW	52 Neutral	$1.41B	―	-18.99%	―	47.69%	69.57%

Embecta Corporation Corporate Events

Embecta Unveils Strategy at Analyst and Investor Day

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.