ConvaTec (CTEC) AI Stock Analysis

• Market Cap: £4.99B
• Dividend Yield: 2.24%
• Average Volume (3M): 7.12M
• Price to Earnings (P/E): 33.6
• Beta (1Y): 0.63
• Revenue Growth: 3.94%
• EPS Growth: 41.63%
• Country: UK
• Employees: 10,489
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 0.06
• Shares Outstanding: 2,049,789,600
• 10 Day Avg. Volume: 8,670,683
• 30 Day Avg. Volume: 7,117,491
• PEG Ratio: -1.93
• Price to Book (P/B): 3.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 41.38
• Enterprise Value/Market Cap: 1.37
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 5.33
• Enterprise Value/Ebitda: 3.53
• 1Y Price Target: £322.54
• Price Target Upside: 33.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 64 Neutral
• Price Target: 277.00p ▲(14.75%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

Earnings Performance

FY24 results are at the top end of guidance 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.

Regulatory Clarity

The postponement of the LCDs by the CMS removes uncertainty regarding the potential impact on InnovaMatrix, alleviating market concerns.

Negative Factors

Market Uncertainty

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

ConvaTec Business Overview & Revenue Model

Company Description

ConvaTec Group Plc develops, manufactures, and markets medical products and technologies worldwide. It offers advanced wound dressings and skin care products for the management of acute and chronic wounds resulting from various conditions, such as diabetes, immobility, and venous disease, as well as from traumatic injury, burns, invasive surgery, and other causes. The company also provides devices, accessories, and services for people with a stoma resulting from colorectal cancer, inflammatory bowel disease, bladder cancer, obesity, and other causes. In addition, it offers continence and critical care products, including intermittent urinary catheters; and products for people with urinary continence issues related to spinal cord injuries, multiple sclerosis, spina bifida, and other urological disorders, as well as devices and products used in intensive care units and hospital settings. Further, the company provides advanced systems for managing acute fecal incontinence, as well as for monitoring urine production output and intra-abdominal pressure; and various disposable medical devices, such as wound drainage systems, urine collection bags and catheters, airway management and oxygen/aerosol therapy devices, suction handles and tubes, gastroenterology tubes, and securement devices. Additionally, it offers disposable infusion sets to manufacturers of insulin pumps for diabetes, as well as similar pumps that are used in continuous infusion treatments for other conditions; and various products to hospital and home healthcare markets. The company sells its products to pharmacies, hospitals, and other acute and post-acute healthcare service providers directly or through distributors and wholesalers. It serves a range of customers, including healthcare providers, patients, and manufacturers. The company was founded in 1978 and is headquartered in Reading, the United Kingdom.

How the Company Makes Money

ConvaTec makes money primarily through the sale of its medical products and technologies across its four key business segments: Advanced Wound Care, Ostomy Care, Continence & Critical Care, and Infusion Care. Revenue is generated from the direct sale of products to hospitals, healthcare providers, and pharmacies, as well as through partnerships with distributors. The company also benefits from strategic partnerships and collaborations that enhance its product offerings and market reach. Additionally, ConvaTec invests in research and development to innovate and expand its product portfolio, which in turn supports its revenue growth.

ConvaTec Financial Statement Overview

Summary

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 indicate robust operational performance. The balance sheet is stable with a debt-to-equity ratio of 0.71, and cash flow analysis reveals strong cash generation. Overall, ConvaTec presents a strong financial profile with consistent growth and profitability.

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: 241.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 241.4 is below the 20-day moving average (MA) of 270.75, below the 50-day MA of 276.69, and below the 200-day MA of 246.81, indicating a bearish trend. The MACD of -8.54 indicates Positive momentum. The RSI at 22.79 is Positive, neither overbought nor oversold. The STOCH value of 17.67 is Positive, 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	£9.62B	29.77	7.78%	3.18%	1.85%	51.77%
CRW	75 Outperform	£787.93M	67.53	4.50%	2.40%	6.74%	54.83%
HIK	68 Neutral	£4.39B	15.69	15.79%	2.90%	5.83%	83.35%
SPI	68 Neutral	£893.26M	35.24	3.41%	1.04%	11.20%	-6.80%
AMS	65 Neutral	£439.04M	61.48	2.93%	1.28%	40.66%	-55.09%
CTEC	64 Neutral	£4.99B	33.57	11.12%	2.24%	3.94%	41.63%
Sector *	57 Neutral	£4.82B	6.64	-62.36%	5.46%	34.03%	6.31%

ConvaTec Corporate Events

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.

ConvaTec Announces Change in Voting Rights by Black Creek Investment Management

ConvaTec Group PLC has announced a change in the voting rights held by Black Creek Investment Management Inc., a Canadian investment management firm. The firm’s voting rights in ConvaTec have decreased from 4.83% to 3.99%, as of April 24, 2025. This adjustment reflects a disposal of shares, impacting the company’s shareholder structure. The shares are owned by 15 separate funds and clients, with Black Creek acting as the investment fund manager and exercising voting rights on their behalf.

ConvaTec Announces Change in Voting Rights Structure

ConvaTec Group PLC has announced a change in its voting rights structure following an acquisition or disposal of voting rights by FMR LLC, a company based in Boston, USA. As of April 25, 2025, FMR LLC holds 5.065% of the voting rights in ConvaTec, amounting to 103,822,184 shares. This change in voting rights could potentially impact ConvaTec’s governance and decision-making processes, influencing its strategic direction and stakeholder interests.

ConvaTec Announces Major Change in Shareholding Structure

ConvaTec Group PLC has announced a change in its major holdings, with FMR LLC acquiring a significant portion of voting rights, now holding 5.065% of the total. This acquisition positions FMR LLC as a notable stakeholder, potentially influencing ConvaTec’s strategic decisions and impacting its market dynamics.