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Sonic Healthcare Limited (SKHHY)
OTHER OTC:SKHHY
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Sonic Healthcare
(OTC:SKHHY)
Rating:69Neutral
Price Target:
$19.00
▲(7.83%Upside)
Sonic Healthcare (SKHHY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.69B
Dividend Yield2.81%
Average Volume (3M)5.03K
Price to Earnings (P/E)23.5
Beta (1Y)0.51
Revenue Growth9.50%
EPS Growth5.09%
CountryUS
Employees42,000
SectorHealthcare
Sector Strength39
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.32
Shares Outstanding494,237,950
10 Day Avg. Volume15,084
30 Day Avg. Volume5,028
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)2.17
Price to Sales (P/S)0.00
P/FCF Ratio17.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Sonic Healthcare Business Overview & Revenue Model
Company DescriptionSonic Healthcare (SKHHY) is a leading global healthcare provider specializing in pathology and diagnostic services. The company operates in multiple sectors, including laboratory medicine, radiology, and clinical services. Sonic Healthcare is known for providing high-quality diagnostic solutions, which are essential for accurate disease diagnosis and management. Their extensive network of laboratories and medical centers spans across Australia, the United States, Europe, and other regions, making them a prominent player in the healthcare industry.
How the Company Makes MoneySonic Healthcare generates revenue primarily through the provision of pathology and diagnostic services. The company's revenue model is largely based on the fees charged for conducting medical tests and providing diagnostic insights to healthcare providers, hospitals, and patients. Key revenue streams include routine pathology testing, specialized diagnostic services, and radiology services. Sonic Healthcare benefits from partnerships with medical institutions and healthcare providers, which ensure a steady demand for their services. Additionally, the company's international operations and acquisitions have expanded its market presence, contributing to its earnings. The growing need for diagnostic testing in healthcare, driven by an aging population and the prevalence of chronic diseases, further supports Sonic Healthcare's revenue generation.
Sonic Healthcare Earnings Call Summary
Earnings Call Date:Feb 19, 2025
(Q2-2025)
| % Change Since: -2.33%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Positive
Sonic Healthcare reported strong financial growth and successful integration of acquisitions, indicating a positive outlook. However, challenges in the USA division and specific regional difficulties like Belgium's revenue decline and initial losses in new U.K. contracts present some concerns.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Sonic Healthcare reported revenue of $4.669 billion, up 8%, and EBITDA of $827 million, up 12%. Net profit rose by 17% to $237 million, and earnings per share increased by 15% to $0.492 per share.
Margin Expansion and Cost Control
The EBITDA margin expanded by 60 basis points, with labor costs as a percentage of revenue reduced by 50 basis points. Excluding recent acquisitions, EBITDA margin expansion was 90 basis points.
Successful M&A Activity
Recent acquisitions in Switzerland and Germany, including the LADR or Kramer Group, are expected to add AUD80 million per annum in EBITDA.
Australian Pathology Growth
The Australian Pathology division reported organic revenue growth of 9%, outperforming the market.
U.K. Division Performance
The U.K. division showed a 10% growth, with a notable new 11-year contract with the Royal National Orthopedic Hospital.
Negative Updates
USA Organic Growth Challenges
The USA division reported a statutory growth of -2% due to the sale of the West division. Organic growth was only 2%, possibly below market.
Belgium Revenue Decline
Organic growth in Belgium was -1%, and statutory growth was -3% due to fee cuts and indexation, although future growth is expected to be positive.
Primary Care Challenges
Sonic Clinical Services reported organic revenue growth of only 2% and flat earnings, attributed to challenging conditions in the primary care market.
Hertfordshire and West Essex Contract
The Hertfordshire and West Essex contract in the U.K. is expected to lose about AUD10 million in the current financial year before becoming profitable in FY 2026.
Company Guidance
During the Sonic Healthcare conference call, the company provided a comprehensive update on its financial performance for the half-year ending December 31, 2024. Key metrics highlighted included a revenue of AUD 4.669 billion, marking an 8% increase, and an EBITDA of AUD 827 million, up 12%. Net profit rose by 17% to AUD 237 million, with earnings per share increasing by 15% to AUD 0.492. The company also reported a strong operational cash flow of AUD 620 million, up 37% from the previous period. Sonic Healthcare's EBITDA margin expanded by 60 basis points, or 90 basis points if excluding recent zero-margin acquisitions. The presentation reaffirmed the company's guidance for the fiscal year, with expected full-year EBITDA in the range of AUD 1.7 billion to AUD 1.75 billion at constant currency. Additionally, Sonic announced an interim dividend of AUD 0.44, an increase of 2.3% from the prior year. The company reported organic growth rates across its divisions, including 9% in Australian pathology and 7% in Germany, and discussed future benefits expected from recent acquisitions, such as the LADR/Kramer Group, which is anticipated to contribute over AUD 80 million in annual EBITDA starting July 2025.Sonic Healthcare Financial Statement Overview
Summary
Sonic Healthcare presents a mixed financial picture. While revenue growth and gross profit margin improvements showcase operational efficiency, declining net income and free cash flow highlight emerging challenges. The balance sheet remains robust with controlled leverage, yet profitability metrics suggest areas needing attention.Income Statement
Sonic Healthcare shows a consistent revenue growth trend, although the recent year's growth slowed down. Gross profit margins have improved significantly, showcasing efficient cost management. However, the decline in net profit and EBIT margins suggests rising operational challenges.65
Positive
Balance Sheet
The company maintains a stable equity base with a moderate debt-to-equity ratio, indicating manageable leverage. Return on equity has decreased, hinting at reduced profitability. The equity ratio suggests a solid asset base backed by equity, reducing financial risk.70
Positive
Cash Flow
Free cash flow has decreased, indicating lower cash generation from operations after capital expenditures. The operating cash flow to net income ratio remains healthy, suggesting good cash conversion efficiency. However, the decline in free cash flow growth rate is concerning.60
Neutral
| Breakdown | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.93B | 7.96B | 9.31B | 9.13B | 6.56B |
| Gross Profit | 2.94B | 2.11B | 3.41B | 3.43B | 1.67B |
| EBITDA | 1.66B | 1.72B | 2.80B | 2.56B | 1.04B |
| Net Income | 511.09M | 684.98M | 1.46B | 1.32B | 527.75M |
Balance Sheet | |||||
| Total Assets | 14.83B | 13.56B | 13.11B | 12.27B | 12.63B |
| Cash, Cash Equivalents and Short-Term Investments | 645.00M | 797.99M | 780.00M | 899.83M | 1.23B |
| Total Debt | 4.52B | 3.10B | 3.01B | 3.23B | 4.62B |
| Total Liabilities | 6.75B | 5.64B | 5.68B | 5.77B | 6.97B |
| Stockholders Equity | 7.92B | 7.74B | 7.27B | 6.38B | 5.57B |
Cash Flow | |||||
| Free Cash Flow | 492.01M | 974.02M | 1.85B | 1.68B | 1.03B |
| Operating Cash Flow | 1.07B | 1.47B | 2.23B | 2.04B | 1.36B |
| Investing Cash Flow | -1.81B | -580.04M | -989.18M | -386.75M | -334.92M |
| Financing Cash Flow | 592.41M | -911.51M | -1.35B | -1.95B | -536.74M |
Sonic Healthcare Technical Analysis
Positive
17.62
Price Trends
17.08
Positive
16.84
Positive
17.23
Positive
Market Momentum
0.13
Negative
59.72
Neutral
98.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKHHY, the sentiment is Positive. The current price of 17.62 is above the 20-day moving average (MA) of 17.31, above the 50-day MA of 17.08, and above the 200-day MA of 17.23, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 59.72 is Neutral, neither overbought nor oversold. The STOCH value of 98.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKHHY.
Sonic Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.75B | 22.36 | 13.35% | 1.81% | 9.38% | 6.43% | |
72 Outperform | $10.47B | 115.81 | 2.67% | 2.71% | 3.31% | -72.63% | |
70 Outperform | $7.72B | 449.94 | -0.92% | ― | -2.16% | -107.31% | |
69 Neutral | $8.69B | 23.46 | 6.96% | 2.81% | 9.50% | 5.09% | |
68 Neutral | $11.94B | 40.06 | 3.82% | 0.28% | 1.62% | 78.53% | |
58 Neutral | $15.96B | ― | -23.82% | ― | -3.47% | 25.55% | |
52 Neutral | $7.50B | 0.31 | -61.87% | 2.27% | 17.10% | 1.59% |
* Healthcare Sector Average
Performance Comparison
SKHHY
Sonic Healthcare
17.62
0.85
5.07%
CRL
Charles River Labs
157.12
-45.34
-22.39%
ILMN
Illumina
100.80
-7.04
-6.53%
RVTY
Revvity
101.31
-3.06
-2.93%
QGEN
Qiagen
48.34
8.32
20.79%
DGX
Quest Diagnostics
176.92
40.03
29.24%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.