Envista Holdings (NVST) AI Stock Analysis

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Envista Holdings

(NYSE:NVST)

50Neutral

Envista Holdings' stock score reflects a mixed financial performance with profitability challenges and a stable balance sheet supported by strong cash flow. Technical indicators show a bearish trend, compounded by a negative P/E ratio and lack of dividend yield. The earnings call provided some positive guidance and operational improvements, but persistent market challenges, especially in China, remain a concern.

Positive Factors

Growth Initiatives

Envista is reinvesting for growth across the business after multiple years of cost-cutting initiatives that hampered commercial execution.

Profitability

Near-term margins will benefit from the reversal of Spark deferral dynamic, Spark shifting from an operating loss to profitability, inflection in implant growth, and restructuring savings executed.

Negative Factors

Market Expectations

NVST introduced a medium-term outlook calling for core revenue growth of 2-4%, which is below prior guidance and market expectations, reflecting a still shaky dental backdrop.

Stock Performance

Since its last Investor Day, NVST's shares have fallen significantly, driven by macroeconomic uncertainty, specialty weakness, and a reduction in dealer inventory.

Envista Holdings (NVST) vs. S&P 500 (SPY)

Market Cap

$2.61B

Dividend YieldN/A

Average Volume (3M)3.56M

Price to Earnings (P/E)―

Beta (1Y)0.72

Revenue Growth-2.18%

EPS Growth-1073.00%

CountryUS

Employees12,300

SectorHealthcare

Sector Strength66

IndustryMedical - Equipment & Services

Share Statistics

EPS (TTM)-6.50

Shares Outstanding172,188,060

10 Day Avg. Volume3,210,735

30 Day Avg. Volume3,564,653

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.14

Price to Cash Flow (P/CF)5.40

P/FCF Ratio5.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$20.75

Price Target Upside36.69% Upside

Rating ConsensusHold

Number of Analyst Covering14

Envista Holdings Business Overview & Revenue Model

Company DescriptionEnvista Holdings Corp. manufactures and markets dental products for diagnosing, treating and preventing dental conditions. The company is headquartered in Brea, California and currently employs 12,800 full-time employees. The firm provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone. The firm operates through two segments: Specialty Products & Technologies, and Equipment & Consumables. Its Specialty Products & Technologies segment develops, manufactures and markets dental implant systems, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. Its Equipment & Consumables segment develops, manufactures and markets dental equipment and supplies used in dental offices, including digital imaging systems, software and other visualization/magnification systems; treatment units and other dental practice equipment; endodontic systems and related consumables; restorative materials and instruments, rotary burs, impression materials, bonding agents and cements and infection prevention products.

How the Company Makes MoneyEnvista Holdings generates revenue through the sale of its dental products and services across various categories, including implants, orthodontics, and digital imaging systems. The company operates through two main segments: Specialty Products & Technologies and Equipment & Consumables. The Specialty Products & Technologies segment includes dental implants and orthodontic solutions, which are sold to dental professionals and clinics. The Equipment & Consumables segment provides products like dental imaging equipment and other consumable dental products. Envista's revenue model relies on direct sales to dental practitioners, partnerships with dental distributors, and long-term contracts with dental service organizations. The company also invests in research and development to innovate and expand its product offerings, which can lead to increased sales and market share. Strategic acquisitions and alliances further enhance its market presence and contribute to its earnings.

Envista Holdings Financial Statement Overview

Summary

Envista Holdings faces challenges in maintaining profitability as evidenced by negative net income in recent periods. While the balance sheet remains relatively stable, improvements in profitability and revenue growth are essential. Strong cash flow generation is a positive, indicating the potential for future operational recovery.

Income Statement

Neutral

The company has faced significant challenges in maintaining profitability, with a negative net income in 2023 and 2024. Revenue has not shown significant growth, and the EBIT margin has deteriorated. This indicates pressure on operational efficiency and profitability.

Balance Sheet

Neutral

The company's debt-to-equity ratio is moderate, and the equity ratio is stable, indicating a balanced capital structure. However, the decline in stockholders' equity and total assets in the recent year is concerning. Return on equity is negatively impacted due to net losses.

Cash Flow

Positive

Operating cash flow remains positive, and free cash flow has shown growth, which is a positive sign. The free cash flow to net income ratio is strong, but the negative net income affects overall cash flow health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.51B	2.57B	2.57B	2.51B	2.28B
	Gross Profit
1.37B	1.45B	1.47B	1.43B	1.16B
	EBIT
-1.04B	31.50M	319.20M	306.20M	33.30M
	EBITDA
-883.80M	171.10M	484.40M	460.50M	205.60M
	Net Income Common Stockholders
-1.12B	-100.20M	243.10M	263.50M	33.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07B	940.00M	606.90M	1.07B	888.90M
	Total Assets
5.35B	6.61B	6.59B	6.57B	6.88B
	Total Debt
1.55B	1.65B	1.53B	1.46B	1.98B
	Net Debt
478.60M	713.60M	922.20M	386.30M	1.09B
	Total Liabilities
2.42B	2.43B	2.38B	2.52B	3.15B
	Stockholders Equity
2.93B	4.17B	4.21B	4.06B	3.72B
Cash Flow		Free Cash Flow
302.70M	217.50M	107.00M	336.70M	236.20M
	Operating Cash Flow
336.50M	275.70M	182.70M	391.40M	283.90M
	Investing Cash Flow
-54.60M	-62.40M	-657.30M	232.90M	-69.10M
	Financing Cash Flow
-103.70M	118.90M	12.50M	-465.60M	492.50M

Envista Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price15.18

Price Trends

50DMA

18.17

Negative

100DMA

19.17

Negative

200DMA

18.68

Negative

Market Momentum

MACD

-0.80

Positive

RSI

38.73

Neutral

STOCH

35.70

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVST, the sentiment is Negative. The current price of 15.18 is below the 20-day moving average (MA) of 16.30, below the 50-day MA of 18.17, and below the 200-day MA of 18.68, indicating a bearish trend. The MACD of -0.80 indicates Positive momentum. The RSI at 38.73 is Neutral, neither overbought nor oversold. The STOCH value of 35.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NVST.

Envista Holdings Risk Analysis

Envista Holdings disclosed 49 risk factors in its most recent earnings report. Envista Holdings reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Envista Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PDCO	69 Neutral	$2.77B	20.21	14.15%	2.49%	-0.85%	-23.40%
LH	68 Neutral	$18.17B	24.56	9.37%	1.33%	0.83%	89.55%
SGRY	63 Neutral	$2.71B	―	-8.90%	―	13.52%	-1296.44%
SHC	61 Neutral	$2.97B	67.40	10.45%	―	4.88%	-13.56%
NVST	50 Neutral	$2.61B	―	-31.47%	―	-2.18%	-1073.00%
Sector *	50 Neutral	$5.51B	2.95	-43.70%	2.78%	16.94%	3.59%
XRAY	46 Neutral	$2.56B	―	-34.77%	4.99%	-4.34%	-634.89%

* Healthcare Sector Average

Performance Comparison

NVST

Envista Holdings

15.18

-4.93

-24.52%

XRAY

DENTSPLY SIRONA

12.83

-16.61

-56.42%

Labcorp Holdings

217.12

16.60

8.28%

PDCO

Patterson Companies

31.33

6.00

23.69%

SGRY

Surgery Partners

21.22

-2.82

-11.73%

SHC

Sotera Health

10.48

-0.61

-5.50%

Envista Holdings Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -26.20% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted consistent performance in line with expectations, with improvements in the implants business and strong growth in Spark. However, challenges persist in the global dental market, particularly in China, affecting overall growth. The introduction of a share repurchase program and operational improvements are positive steps forward.

Highlights

Core Growth and Adjusted EBITDA Margin

Fourth quarter core growth of 2% and an adjusted EBITDA margin of 13.9%, consistent with expectations.

Implants Business Improvement

Continued improvement in the implants business, including positive growth in North America.

Spark Performance

Spark grew double-digits in 2024, with consecutive quarter-on-quarter gross margin improvement and plans to turn operating profit positive in the second half of 2025.

Free Cash Flow Increase

$303 million in free cash flow for 2024, up 35% compared to the prior year.

Share Repurchase Program

Board authorized share repurchases of up to $250 million over the next two years.

Operational Improvements

Strong contributions from the Envista Business System, with improvements in working capital and customer service.

Leadership and Talent Development

Refreshed senior team with world-class leaders and made investments in engagement and talent development.

Lowlights

Soft Global Dental Market

The global dental market was described as soft but stable, with headwinds in specific geographic markets and macro volatility.

2024 Core Growth

Overall core growth in 2024 was negative 1.5%.

Challenges in China

Significant slowdown in China, particularly affecting the Diagnostics and orthodontics businesses, with a 50% decline in brackets and wires due to VBP preparations.

Diagnostics Business Decline

The Diagnostics business contracted, with negative imaging growth in several key markets, including China.

Adjusted EBITDA Margin Decline

Adjusted EBITDA margin for Q4 was 170 basis points lower than the prior year.

Company Guidance

During Envista Holdings Corporation’s Fourth Quarter 2024 Earnings Results Conference Call, the company provided detailed guidance for 2025. Envista expects core growth of 1% to 3% and an adjusted EBITDA margin of approximately 14%. Furthermore, they introduced a new guidance metric for earnings per share (EPS), anticipated to range between $0.95 and $1.05. The company also highlighted the expected benefits from its recent restructuring, which should yield approximately $20 million in gross annualized savings. Additionally, Envista announced a board-authorized share repurchase program of up to $250 million over the next two years, reflecting its strong cash flow generation. Overall, the guidance suggests a stable outlook with a focus on continued operational improvements and strategic investments to drive growth.

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.