Medline (MDLN) AI Stock Analysis

• Market Cap: $56.13B
• Dividend Yield: N/A
• Average Volume (3M): 8.56M
• Price to Earnings (P/E): 29.4
• Beta (1Y): 2.98
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 43,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): N/A
• Shares Outstanding: 811,647,500
• 10 Day Avg. Volume: 1,994,195
• 30 Day Avg. Volume: 8,556,617
• PEG Ratio: -4.97
• Price to Book (P/B): 3.18
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 19.56
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 1.59
• Enterprise Value/Gross Profit: 6.48
• Enterprise Value/Ebitda: 14.58
• 1Y Price Target: $52.29
• Price Target Upside: 19.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 27
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $46.00 ▲(5.53% Upside)
• Action: N/A Date: 02/27/26
• Date: Action: N/A 02/27/26

The score is primarily driven by solid financial performance (strong growth and improving gross margin, but leveraged balance sheet and mixed earnings-to-cash quality). Technicals are supportive with positive momentum indicators. Valuation tempers the rating due to a higher P/E, while the IPO and related deleveraging provide a modest positive offset.

Positive Factors

Scale & diversified model

Medline's integrated manufacturing plus broad distribution to hospitals, surgery centers and long-term care creates recurring volume and buying leverage. Durable scale supports procurement advantages, contract retention and reinvestment capacity across market cycles.

Improving gross margins

Sustained gross margin expansion suggests lasting benefits from product mix (higher-margin consumables), pricing and cost control. Higher gross margins provide structural cushion to absorb SG&A or input-cost swings and support longer-term profitability.

Stronger cash generation

Stable operating cash flow and notable free cash flow improvement in 2025 strengthen the firm's ability to fund capex, repay debt, and support working-capital needs. Reliable cash generation underpins strategic flexibility and deleveraging over the medium term.

Negative Factors

Meaningful leverage

Debt-to-equity near or above 1x limits financial flexibility if volumes slow or margins compress. Higher leverage increases interest and refinancing risk, reduces room for opportunistic investment, and amplifies downside in cyclical stress over the next several quarters.

Earnings-to-cash inconsistency

Persistent gap between reported earnings and cash flow implies working-capital or timing effects, weakening earnings quality. If growth requires more inventory or receivables, cash strain could intensify and hinder sustainable cash available for debt paydown or investments.

Margin volatility / limited net profit conversion

While gross margins improved, net margin compression shows scale hasn't fully converted to bottom-line gains. Structural cost pressures, SG&A or mix shifts could persist, leaving profitability vulnerable and limiting durable earnings leverage from revenue growth.

Medline Business Overview & Revenue Model

Company Description

Medline Inc. manufactures med-surg products serving the hospital, surgery centers, physician offices, post-acute facilities, and nursing home sites of care in the United States and Internationally. It operates through two segments: Medline Brand and Supply Chain Solutions. The Medline Brand segment procures and manufactures products from three product categories include surgical solutions, front line care, and laboratory and diagnostics. Its front line care offers med-surg products for patient-facing needs, including wound care products, exam gloves, skin care and incontinence products, environment cleaning supplies, textiles, hand sanitizer, durable medical equipment, patient plastics, and decolonization and infection control products. Its surgical solutions provide operating room and perioperative environment product solutions, including surgical procedure trays, drapes and gowns, personal protective equipment, sterile wraps, surgical instruments, surgeon's gloves, procedure kits, and orthopedic implants. Its laboratory and diagnostics offer laboratory and diagnostic product solutions, including point of care testing, analyzers and instrumentation, lab and diagnostic consumables, diagnostic instruments, vital signs monitors, and anatomic pathology and phlebotomy products. It provides its products to domestic and international consumers. The Supply Chain Solutions segment procures and distributes a variety of third-party products from national brands. It provides logistics and supply chain optimization services to domestic and international consumers. It also provides supply chain optimization services such as, consulting engagements, outsourced warehouse and technology management, put-away-ready packaging, third-party logistics, inventory rationalization, and route planning. Medline Inc. was founded in 1966 and is based in Northfield, Illinois.

How the Company Makes Money

Medline primarily makes money by manufacturing and selling its own branded medical consumables and by distributing medical-surgical supplies and equipment from third-party manufacturers to healthcare providers. Key revenue streams include: (1) sales of Medline-manufactured private-label/house-brand products (often higher-margin consumables such as PPE, wound care, incontinence products, and sterile procedure packs); (2) distribution revenue from reselling third-party medical-surgical products, where Medline earns margin on the spread between its procurement cost and the price charged to customers; and (3) supply chain and logistics-related services bundled into customer contracts, including inventory management and delivery programs, which support retention and wallet share and may be reflected through product pricing and contracted terms rather than separately itemized fees. Medline commonly sells through long-term agreements with hospitals/health systems and through participation in group purchasing organizations (GPOs), which can influence volume, pricing, and contract access. Significant factors contributing to earnings include scale purchasing advantages, operational efficiency in warehousing and fulfillment, product mix toward higher-margin consumables and custom procedure packs, and long-term customer relationships that drive recurring replenishment orders.

Medline Financial Statement Overview

Summary

Strong revenue scaling and improving gross margin support the score, and free cash flow improved in 2025. Offsetting this are meaningful leverage (debt-to-equity rising to ~1.17x in 2025), some margin volatility, and less consistent earnings-to-cash alignment (operating cash flow covering ~70–79% of net income).

Income Statement

Revenue is scaling well, with 2025 showing a very strong jump versus prior years, and profitability has normalized after a weak 2023. Gross margin improved steadily (about 22.5% in 2023 to 26.4% in 2025), indicating better pricing/mix or cost control. The main drawback is margin volatility: net margin fell from ~4.7% (2024) to ~4.1% (2025) and operating profitability also eased versus 2024, suggesting growth is not fully translating into incremental profit.

Balance Sheet

Leverage is meaningful, with debt roughly in line with equity (debt-to-equity around ~1.0x in 2023–2024 and rising to ~1.17x in 2025), which reduces flexibility if operating conditions tighten. Equity declined notably in 2025 while debt also moved lower, but the net effect is higher leverage. A positive is improved shareholder returns versus 2023, with return on equity rising to ~10.8% in 2025, though the higher leverage profile remains a key risk.

Cash Flow

Cash generation is solid and relatively steady, with operating cash flow around $1.7B across the last three years and free cash flow improving in 2025 (strong growth versus 2024). Free cash flow conversion is strong in 2025 (free cash flow roughly matching net income). The main weakness is that operating cash flow covers only about 70–79% of net income across the period, implying working-capital or non-cash timing effects that make earnings quality less consistent.

Breakdown	Dec 2025	Dec 2024	Dec 2023
Income Statement
Total Revenue	28.43B	25.51B	23.23B
Gross Profit	7.52B	6.29B	5.22B
EBITDA	2.92B	3.53B	2.59B
Net Income	1.16B	1.20B	234.00M
Balance Sheet
Total Assets	38.48B	35.98B	36.12B
Cash, Cash Equivalents and Short-Term Investments	1.94B	250.00M	1.58B
Total Debt	12.56B	16.90B	16.83B
Total Liabilities	19.20B	19.45B	19.14B
Stockholders Equity	10.74B	16.52B	16.98B
Cash Flow
Free Cash Flow	1.74B	1.41B	1.40B
Operating Cash Flow	1.74B	1.77B	1.69B
Investing Cash Flow	-474.00M	-1.49B	-312.00M
Financing Cash Flow	399.00M	-1.61B	-191.00M

Medline Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BDX	68 Neutral	$43.89B	28.46	6.93%	2.13%	8.23%	-2.04%
MMSI	68 Neutral	$3.96B	40.58	8.52%	―	11.49%	-2.89%
MDLN	65 Neutral	$56.13B	29.43	7.59%	―	―	―
ICUI	57 Neutral	$3.10B	4,802.44	0.04%	―	-0.81%	93.27%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
TFX	47 Neutral	$4.66B	―	-23.70%	1.11%	5.43%	-245.18%
BAX	46 Neutral	$8.31B	-10.24	-13.78%	2.75%	-21.20%	-325.40%