ConvaTec (CTEC) AI Stock Analysis

• Market Cap: £4.76B
• Dividend Yield: 2.16%
• Average Volume (3M): 8.95M
• Price to Earnings (P/E): 29.6
• Beta (1Y): 0.69
• Revenue Growth: 4.18%
• EPS Growth: 37.65%
• Country: UK
• Employees: 10,489
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 0.06
• Shares Outstanding: 2,048,547,400
• 10 Day Avg. Volume: 8,528,466
• 30 Day Avg. Volume: 8,946,267
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £318.91
• Price Target Upside: 36.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 64 Neutral
• Price Target: 277.00p ▲(18.68% Upside)

ConvaTec's strong financial performance and strategic positioning are tempered by bearish technical indicators and a high valuation. Regulatory challenges may pose risks, but the company's innovation pipeline and operational strength support a moderately positive outlook.

Positive Factors

Financial Performance

FY24 results are at the top end of guidance and expectations, with 7.7% organic revenue growth the best since IPO.

Growth Prospects

Convatec's mid-term growth and margin expansion targets remain on track, reinforcing confidence in the company's growth prospects.

Share Buyback

ConvaTec announced a non-discretionary share buyback program to return up to $300 million of surplus capital to shareholders.

Negative Factors

Leverage Concerns

The share buyback program would take ConvaTec's FY25 leverage from 1.8x to 2.2x, which is above the company's leverage target of 2x.

Market Uncertainty

CTEC has subsequently raised its guidance for InnovaMatrix from $50m to $75m taking into account the current ongoing uncertainty in the market.

ConvaTec Business Overview & Revenue Model

Company Description

ConvaTec (CTEC) is a global medical technology company that specializes in the development and manufacturing of innovative wound care, ostomy care, continence care, and infusion devices. With a strong focus on improving the quality of life for patients and caregivers alike, ConvaTec offers a range of products designed to address chronic and acute medical conditions. The company's core offerings include advanced wound dressings, ostomy pouches, catheter systems, and infusion sets, catering to diverse healthcare needs across various markets worldwide.

How the Company Makes Money

ConvaTec generates revenue primarily through the sale of its medical products across its key segments: wound care, ostomy care, continence care, and infusion devices. The company sells its products directly to healthcare providers and through distributors, which allows it to reach a broad customer base. Significant revenue streams include the ongoing need for wound care supplies and ostomy products, driven by an aging population and increasing incidence of chronic illnesses. Additionally, ConvaTec's partnerships with healthcare institutions and participation in government healthcare programs enhance its market presence. The company's focus on research and development also enables it to introduce new products, thereby expanding its offerings and driving sales growth.

ConvaTec Financial Statement Overview

Summary

ConvaTec exhibits strong financial performance with consistent revenue growth and solid profitability margins. The company maintains efficient cost management and robust operational performance. A stable financial position with a balanced debt-to-equity ratio and effective cash flow management supports its operations and investments.

Income Statement

ConvaTec has demonstrated strong revenue growth with a 6.84% increase from 2023 to 2024. The company maintains impressive gross and net profit margins at 56.06% and 8.32% respectively for 2024, reflecting efficient cost management and profitability. The EBIT and EBITDA margins, at 14.19% and 23.60%, indicate robust operational performance. Overall, the income statement reflects a positive growth trajectory and solid profitability.

Balance Sheet

The company maintains a stable financial position with a debt-to-equity ratio of 0.71 for 2024, indicating a balanced approach to leverage. The equity ratio stands at 48.04%, suggesting strong equity backing relative to total assets. Return on equity is moderate at 11.28%, showing reasonable returns on shareholder investments. While the balance sheet is generally strong, a slight decrease in stockholders’ equity over the years could be an area to monitor.

Cash Flow

ConvaTec's cash flow analysis reveals a healthy operating cash flow to net income ratio of 2.08 in 2024, demonstrating effective cash generation relative to its earnings. Free cash flow increased by 15.08% from 2023 to 2024, indicating improved cash availability after capital expenditures. The free cash flow to net income ratio of 1.44 further underscores strong cash flow management. Overall, the company exhibits efficient cash flow dynamics, supporting its ongoing operations and investments.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.29B	2.14B	2.07B	2.04B	1.89B
Gross Profit	1.28B	1.20B	1.12B	1.12B	1.02B
EBITDA	540.20M	455.50M	429.80M	405.40M	390.70M
Net Income	190.50M	130.30M	62.90M	117.60M	112.50M
Balance Sheet
Total Assets	3.52B	3.71B	3.59B	3.67B	3.77B
Cash, Cash Equivalents and Short-Term Investments	64.70M	98.30M	145.80M	463.40M	565.40M
Total Debt	1.20B	1.31B	1.30B	1.44B	1.55B
Total Liabilities	1.83B	2.02B	1.98B	1.98B	2.10B
Stockholders Equity	1.69B	1.69B	1.61B	1.69B	1.67B
Cash Flow
Free Cash Flow	274.10M	238.20M	137.50M	211.80M	313.30M
Operating Cash Flow	396.20M	367.40M	281.70M	305.90M	399.50M
Investing Cash Flow	-160.80M	-285.70M	-348.30M	-206.50M	-56.30M
Financing Cash Flow	-263.80M	-124.00M	-237.10M	-199.90M	-162.10M

ConvaTec Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 233.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CTEC, the sentiment is Negative. The current price of 233.4 is above the 20-day moving average (MA) of 230.94, below the 50-day MA of 248.80, and below the 200-day MA of 247.62, indicating a neutral trend. The MACD of -2.60 indicates Negative momentum. The RSI at 45.45 is Neutral, neither overbought nor oversold. The STOCH value of 41.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:CTEC.

ConvaTec Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SN	76 Outperform	£12.02B	31.84	9.30%	2.31%	2.51%	56.56%
CRW	71 Outperform	£770.42M	67.53	4.50%	1.31%	6.74%	54.83%
HIK	70 Outperform	£4.01B	14.17	15.66%	3.45%	3.73%	27.13%
SPI	69 Neutral	£909.36M	49.46	2.51%	1.03%	6.95%	-34.38%
AMS	65 Neutral	£436.97M	62.84	2.93%	1.27%	40.66%	-55.09%
CTEC	64 Neutral	£4.76B	29.65	12.73%	2.16%	4.18%	37.65%
Sector *	51 Neutral	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%

ConvaTec Corporate Events

Convatec CEO Sells Minority Shareholding Amid Medical Leave

Convatec announced that its CEO, Karim Bitar, sold a minority portion of his shares in the company for personal reasons unrelated to the business. Despite this sale, Bitar retains a significant stake in Convatec and expressed confidence in the company’s strong leadership and growth prospects. This transaction, disclosed under the Market Abuse Regulation, is not expected to impact the company’s operations or strategic direction.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

Convatec CEO Takes Medical Leave; Interim Leadership Announced

Convatec announced that its Chief Executive Officer, Karim Bitar, will be taking a medical leave of absence. During his absence, Jonny Mason, the current Chief Financial Officer, will serve as the Interim CEO, while Fiona Ryder, the Group Financial Controller, will step in as the Interim CFO. This leadership change is significant for Convatec as it navigates this transition period, potentially impacting its operations and strategic direction.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

Convatec Addresses CMS Proposal Impact on Skin Substitutes

Convatec has responded to the CMS draft payment proposal for skin substitutes in the U.S., expressing concerns that the proposed reimbursement rate could limit patient choice and product quality. The company is actively participating in the public comment process and highlights its commitment to the segment with its InnovaMatrix® product, which contributes significantly to its revenue. Convatec anticipates potential revenue impacts if the proposal is implemented as is, and plans to update investors on its financial outlook in upcoming results.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

ConvaTec Group PLC Announces Change in Major Holdings

ConvaTec Group PLC announced a change in major holdings, with FIL Limited reducing its voting rights in the company. The voting rights held by FIL Limited decreased from 6.2098% to 5.9863%, crossing the 5% threshold downwards. This change in holdings may impact ConvaTec’s shareholder dynamics and influence within the company.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

Convatec Awards Performance Shares and RSUs to Leadership

Convatec Group Plc announced the grant of Performance Share Awards (PSAs) and Restricted Stock Unit Awards (RSUs) to its CEO, Karim Bitar, and CFO, Jonny Mason, under the company’s 2025 Omnibus Incentive Plan. These awards, which are part of the company’s remuneration policy approved by shareholders, are set to vest in 2028 and are contingent on specific performance conditions and continued employment. This move aligns with Convatec’s strategic goals and aims to incentivize its leadership, potentially impacting its operational focus and market competitiveness.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

Convatec AGM Resolutions Passed Amid Shareholder Engagement Focus

Convatec Group Plc successfully held its Annual General Meeting, where all proposed resolutions were passed. Notably, the Directors’ Remuneration Policy and the Convatec Group Omnibus Incentive Plan received less than 80% approval, prompting the company to commit to further shareholder engagement. This outcome underscores the importance of ongoing dialogue with investors to align on key governance issues.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.

Convatec Reports Strong Start to 2025 with Robust Revenue Growth

Convatec reported a strong start to 2025, with broad-based organic revenue growth across its four main categories, despite challenges with its InnovaMatrix® product due to postponed US regulatory decisions. The company has tightened its financial guidance for the year, expecting organic revenue growth excluding InnovaMatrix® to be between 5.5-7.0%. Convatec’s innovation pipeline is robust, with new product launches planned across various segments, and the company is making strides in automation and productivity improvements. These developments position Convatec well for sustained revenue and earnings growth, benefiting stakeholders and enhancing its market position.

The most recent analyst rating on (GB:CTEC) stock is a Buy with a £305.00 price target. To see the full list of analyst forecasts on ConvaTec stock, see the GB:CTEC Stock Forecast page.