Medtronic (MDT) AI Stock Analysis

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Medtronic

(NYSE:MDT)

75Outperform

Medtronic exhibits strong financial performance and a positive outlook from recent earnings, supported by strategic innovations and international expansion. However, technical indicators currently show bearish trends, and the stock's high valuation is a concern. The new CFO appointment is a positive step for future strategic and financial growth.

Positive Factors

Clinical Trial Results

MDT's SMART trial 2-year follow-up results demonstrate that the Evolut TAVR platform continues to demonstrate superior bioprosthetic valve dysfunction (BVD) rates compared to Edwards' Sapien system in small annuli patients.

Manufacturing Expansion

MDT has successfully scaled up Sphere 9 catheter production and is meeting strong demand by expanding manufacturing capabilities.

Product Approval

MDT announced FDA approval of the Simplera Sync sensor for the 780G insulin pump, which should make MDT more competitive.

Negative Factors

Economic Environment

High interest rates may continue to suppress R&D capabilities.

Market Competition

Medtronic is at risk of losing 50% of its insulin pump market to GLP-1 drugs.

Profit Margins

Net profit margins have fallen from 16.6% to 11.4%.

Medtronic (MDT) vs. S&P 500 (SPY)

Market Cap

$108.82B

Dividend Yield3.3%

Average Volume (3M)7.39M

Price to Earnings (P/E)25.8

Beta (1Y)0.51

Revenue Growth2.72%

EPS Growth4.48%

CountryUS

Employees95,000

SectorHealthcare

Sector Strength56

IndustryMedical - Devices

Share Statistics

EPS (TTM)3.29

Shares Outstanding1,282,543,500

10 Day Avg. Volume5,703,400

30 Day Avg. Volume7,392,217

Financial Highlights & Ratios

PEG Ratio5.76

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.26

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit6.48

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$96.00

Price Target Upside13.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

Medtronic Business Overview & Revenue Model

Company DescriptionMedtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.

How the Company Makes MoneyMedtronic primarily generates revenue through the sale of medical devices and therapies across its four major business segments. The Cardiac and Vascular Group, which includes products for cardiac rhythm disorders, coronary artery disease, heart valves, and peripheral vascular disease, is a significant contributor to the company's revenue. The Minimally Invasive Therapies Group offers surgical solutions, advanced energy products, and patient monitoring systems. The Restorative Therapies Group provides products for spinal surgery, neuromodulation, and neurovascular therapies. The Diabetes Group focuses on insulin pumps and continuous glucose monitoring systems. Medtronic's revenue model is supported by strategic acquisitions, research and development investments, and collaborations with healthcare providers and institutions. Additionally, the company leverages its global distribution network and strong relationships with healthcare professionals to maintain and grow its market share.

Medtronic Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes income from different business units, highlighting which segments drive growth and profitability, and indicating strategic focus areas.

Chart InsightsMedtronic's Cardiovascular segment shows notable growth, aligning with the earnings call's highlight of a 22% surge in cardiac ablation solutions. The Neuroscience and Diabetes segments also demonstrate strong performance, consistent with double-digit growth reported in the call. However, the Medical Surgery segment faces challenges, likely impacted by U.S. distributor dynamics and competitive pressures. Despite these hurdles, Medtronic's strategic focus on innovation and international expansion is driving overall revenue growth, with expectations for further acceleration in the upcoming quarters.

Data provided by:

Main Street Data

Medtronic Financial Statement Overview

Summary

Medtronic demonstrates solid financial health with stable revenue growth, strong profitability, and efficient cash flow management. Despite moderate leverage, the company maintains a robust equity base, ensuring financial stability. Overall, Medtronic is well-positioned with a strong financial foundation.

Income Statement

―

Medtronic shows strong profitability with a stable Gross Profit Margin of 52.8% in TTM. The Net Profit Margin improved to 12.8% in TTM from 11.4% previous year, indicating efficient cost management. Revenue grew by 2.58% in TTM, showcasing steady growth. EBIT and EBITDA margins also improved, reflecting operational efficiency.

Balance Sheet

The company maintains a solid financial structure with a Debt-to-Equity Ratio of 0.54, indicating moderate leverage. Return on Equity stands at 8.63%, reflecting decent profitability for shareholders. The Equity Ratio of 54.9% suggests a strong equity base, enhancing financial stability.

Cash Flow

―

Operating Cash Flow to Net Income Ratio is 1.71, highlighting robust cash generation relative to net income. Free Cash Flow increased by 5.13% YoY, indicating effective cash management. The Free Cash Flow to Net Income Ratio of 1.28 underscores strong cash flow coverage.

Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
32.36B	31.23B	31.69B	30.12B	28.91B
	Gross Profit
21.15B	20.51B	21.54B	19.63B	19.49B
	EBIT
5.14B	5.49B	5.75B	4.48B	4.79B
	EBITDA
8.20B	8.47B	9.55B	8.19B	7.83B
	Net Income Common Stockholders
3.68B	3.76B	5.04B	3.61B	4.79B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.01B	7.96B	10.57B	10.82B	10.95B
	Total Assets
89.98B	90.95B	90.98B	93.08B	90.69B
	Total Debt
26.05B	24.36B	24.11B	26.39B	24.80B
	Net Debt
24.76B	22.82B	20.40B	22.80B	20.66B
	Total Liabilities
39.56B	39.28B	38.26B	41.48B	39.82B
	Stockholders Equity
50.21B	51.48B	52.55B	51.43B	50.74B
Cash Flow		Free Cash Flow
5.20B	4.58B	5.98B	4.88B	6.02B
	Operating Cash Flow
6.79B	6.04B	7.35B	6.24B	7.23B
	Investing Cash Flow
-2.37B	-3.49B	-1.66B	-2.87B	-3.20B
	Financing Cash Flow
-4.45B	-4.96B	-5.34B	-4.14B	-4.20B

Medtronic Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price84.85

Price Trends

50DMA

87.73

Negative

100DMA

86.31

Negative

200DMA

85.70

Negative

Market Momentum

MACD

-0.83

Negative

RSI

49.15

Neutral

STOCH

75.32

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MDT, the sentiment is Neutral. The current price of 84.85 is above the 20-day moving average (MA) of 83.49, below the 50-day MA of 87.73, and below the 200-day MA of 85.70, indicating a neutral trend. The MACD of -0.83 indicates Negative momentum. The RSI at 49.15 is Neutral, neither overbought nor oversold. The STOCH value of 75.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MDT.

Medtronic Risk Analysis

Medtronic disclosed 34 risk factors in its most recent earnings report. Medtronic reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Medtronic Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SYK	78 Outperform	$144.36B	51.06	14.26%	0.87%	10.76%	-15.22%
BSX	76 Outperform	$155.24B	76.88	9.65%	―	19.35%	14.31%
DXCM	76 Outperform	$25.93B	46.43	23.72%	―	9.11%	-17.87%
MDT	75 Outperform	$108.82B	25.79	8.42%	3.30%	2.72%	4.48%
EW	71 Outperform	$44.31B	30.55	17.17%	―	-9.84%	6.19%
ZBH	65 Neutral	$20.25B	23.10	7.24%	0.94%	3.84%	-9.29%
Sector *	52 Neutral	$5.35B	3.81	-42.57%	2.86%	17.10%	1.33%

* Healthcare Sector Average

Performance Comparison

MDT

Medtronic

83.45

4.36

5.51%

BSX

Boston Scientific

104.93

32.38

44.63%

DXCM

Dexcom

81.62

-48.03

-37.05%

Edwards Lifesciences

75.11

-9.98

-11.73%

SYK

Stryker

378.22

55.70

17.27%

ZBH

Zimmer Biomet Holdings

102.38

-17.12

-14.33%

Medtronic Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q3-2025)

% Change Since: -7.85%|

Next Earnings Date:May 21, 2025

Earnings Call Sentiment Positive

The earnings call was largely positive, highlighting strong revenue growth, advancements in key segments, and successful international expansion. However, some challenges in the surgical portfolio and distributor dynamics were noted.

Q3-2025 Updates

Positive Updates

Consistent Revenue Growth

Medtronic achieved mid-single-digit revenue growth for the ninth consecutive quarter, with key areas like cardiac ablation solutions growing by 22%.

Strong Performance in Key Segments

Leadless pacing, neuromodulation, and diabetes grew double-digits, while structural heart and U.S. cranial and spinal technologies grew high-single-digits.

EPS Growth and Margin Improvement

The company reported high-single-digit EPS growth ahead of consensus and guidance, with improvements in both gross and operating margins.

Pipeline Advancements

Advancements in innovation with renal denervation and progress in significant markets like diabetes and cardiac ablation solutions.

Successful International Growth

International markets grew 5%, with high-single-digit growth in Japan and emerging markets showing high-single-digit to double-digit growth.

Negative Updates

Impact of Distributor Dynamics

A change in U.S. distributor buying patterns adversely affected surgical performance, costing approximately 200 basis points in growth.

Challenges in Medical Surgical Portfolio

Despite international growth, the U.S. surgical portfolio underperformed due to competitive pressures in the stapling franchise.

Peripheral Vascular Decline

Peripheral vascular performance declined due to volatility in China related to value-based procurement (VBP).

Company Guidance

In the fiscal year 2025 third quarter earnings call, Medtronic reported a consistent mid-single-digit revenue growth, marking the ninth consecutive quarter of such performance. The company highlighted a robust 22% growth in its Cardiac Ablation Solutions and double-digit growth in leadless pacing, neuromodulation, and diabetes segments. Structural heart and U.S. cranial and spinal technologies grew high-single-digits. Medtronic's EPS increased by high-single-digits, surpassing both consensus and the higher end of their guidance range. Additionally, the company anticipates further revenue and EPS acceleration in the fourth quarter, driven by its innovative pipeline and expansion into high-potential markets. The strategic focus on disciplined pricing, operating leverage, and strong free cash flow is expected to deliver significant shareholder value.

Medtronic Corporate Events

Executive/Board Changes

Medtronic Announces Leadership Transition in Finance Department

Neutral

Mar 17, 2025

On March 12, 2025, Jennifer M. Kirk, Medtronic’s Global Controller and Principal Accounting Officer, announced her resignation effective May 2, 2025, to become CEO of Exubrion Therapeutics. Denise L. Blomquist, with a 21-year tenure at Medtronic, will succeed her starting March 17, 2025, ensuring a smooth transition and continuity in the company’s financial leadership.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.