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Sonic Healthcare Limited (SKHHY)
OTHER OTC:SKHHY
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Sonic Healthcare
(OTC:SKHHY)
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Rating:69Neutral
Price Target:
$19.00
▲(33.71% Upside)
Sonic Healthcare's strong earnings growth and successful integration of acquisitions are significant positives, contributing to a higher score. However, challenges in certain divisions and a high valuation compared to industry norms bring the overall score down. The technical analysis indicates positive momentum, but financial performance weaknesses, especially in cash flow, need attention.
Sonic Healthcare (SKHHY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.93B
Dividend Yield4.42%
Average Volume (3M)55.78K
Price to Earnings (P/E)20.2
Beta (1Y)0.47
Revenue Growth8.13%
EPS Growth-1.78%
CountryUS
Employees42,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.37
Shares Outstanding494,237,950
10 Day Avg. Volume0
30 Day Avg. Volume55,781
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.66
Enterprise Value/Revenue1.33
Enterprise Value/Gross Profit4.84
Enterprise Value/Ebitda8.71
Forecast
1Y Price Target
$19.00Price Target Upside33.71% Upside
Rating ConsensusHold
Number of Analyst Covering0
Sonic Healthcare Business Overview & Revenue Model
Company DescriptionSonic Healthcare (SKHHY) is a global leader in medical diagnostics and healthcare services. Established in Australia, the company operates through three main sectors: laboratory services, imaging, and clinical services. Sonic Healthcare offers comprehensive laboratory services, including pathology and radiology, across multiple continents. The company is renowned for its commitment to quality and innovation, providing essential diagnostic services that aid in disease detection, diagnosis, and management for patients and healthcare professionals worldwide.
How the Company Makes MoneySonic Healthcare generates revenue primarily through its laboratory services, which include pathology and radiology diagnostics. These services are provided to a wide range of clients, including hospitals, medical practitioners, and patients, both in the public and private sectors. The company also earns income from its imaging services, which offer advanced diagnostic imaging solutions. Sonic Healthcare's operations span several countries, allowing it to benefit from diverse healthcare markets. The company's revenue model is bolstered by strategic partnerships with healthcare providers and continuous investment in technology and infrastructure to enhance service quality and efficiency. Additionally, acquisitions of local diagnostic companies contribute to Sonic Healthcare's growth and revenue diversification.
Sonic Healthcare Earnings Call Summary
Earnings Call Date:Aug 20, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 23, 2026
Earnings Call Sentiment Positive
Sonic Healthcare demonstrated strong financial performance and strategic growth through acquisitions and new contracts. However, challenges in the U.S. market and regulatory pressures pose some risks. The company's outlook remains positive, with expected strong earnings growth in FY 2026.Q4-2025 Updates
Positive Updates
Strong Financial Performance
Sonic Healthcare reported revenue of $9.645 billion, up 8% from the previous year. EBITDA also increased by 8%, reaching $1.725 billion, and net profit rose by 7% to $514 million.
Successful Acquisitions and Integration
The company successfully integrated several acquisitions, including LADR in Germany, which will contribute significant revenue. Synergies from Swiss acquisitions are expected to peak in FY 2026 and FY 2027.
Positive Outlook for FY 2026
Guidance for FY 2026 suggests strong earnings growth, with expected EBITDA of $1.87 billion to $1.95 billion on a constant currency basis, representing up to 13% growth on FY 2025.
Expansion in Australian Pathology
Australian Pathology division showed strong performance with organic revenue growth of 6% and successful cost management strategies.
New Contracts and Market Expansion
Sonic Healthcare won new contracts in the U.K. and Australia, including lab services for North Shore Private Hospital and Hollywood Private Hospital. They also secured a contract for the National Bowel Cancer Screening program.
Negative Updates
Challenges in U.S. Market
Statutory growth in the U.S. was negative 2%, impacted by the sale of the West division and the loss of a payer contract in Alabama. Organic growth was minus 1% on a constant currency basis.
Regulatory and Contractual Challenges
The company faced a reduction in the minimum KV quota for statutory insurance fees in Germany and potential PAMA fee cuts in the U.S., though the latter may be postponed or canceled.
Anatomical Pathology Revenue Pressure
Anatomic pathology growth in the U.S. was weaker than clinical pathology, partly due to the loss of pathologists in small labs and the impact of the Change Healthcare cyber attack.
Company Guidance
During the Sonic Healthcare conference call for the fiscal year ended June 30, 2025, the company reported positive financial metrics and provided guidance for the upcoming year. Revenue for FY 2025 was $9.645 billion, marking an 8% increase from the prior year, while EBITDA also rose 8% to $1.725 billion. Net profit reached $514 million, up 7%, with cash generation nearing $1.3 billion and earnings per share of $0.1067. The company achieved its guidance with a constant currency EBITDA of $1.702 billion, and organic revenue growth was 5%. Looking ahead to FY 2026, Sonic Healthcare expects strong earnings growth, driven by organic growth and synergies from acquisitions in Switzerland and Germany, particularly from LADR. The EBITDA guidance for FY 2026 is set between $1.87 billion and $1.95 billion on a constant currency basis, equating to $1.94 billion to $2.02 billion using current exchange rates, reflecting up to 13% EBITDA growth from FY 2025, or about 16% growth with current exchange rates. The company anticipates an effective tax rate of around 27% and an interest expense increase of 15% to 20% on a constant currency basis. Sonic Healthcare also announced a final dividend of $0.63 per share, with total dividends for the year up 1% to $1.07 per share.Sonic Healthcare Financial Statement Overview
Summary
Sonic Healthcare shows solid revenue growth and improved gross profit margins, indicating operational efficiency. However, declining net income and free cash flow highlight emerging financial challenges. The balance sheet is robust with controlled leverage, but decreasing profitability metrics suggest areas needing improvement.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.66B | 8.93B | 7.96B | 9.31B | 9.13B | 6.56B |
| Gross Profit | 2.38B | 2.94B | 2.11B | 3.41B | 3.43B | 1.67B |
| EBITDA | 1.32B | 1.66B | 1.72B | 2.80B | 2.56B | 1.04B |
| Net Income | 511.09M | 511.09M | 684.98M | 1.46B | 1.32B | 527.75M |
Balance Sheet | ||||||
| Total Assets | 14.83B | 14.83B | 13.56B | 13.11B | 12.27B | 12.63B |
| Cash, Cash Equivalents and Short-Term Investments | 645.00M | 645.00M | 797.99M | 780.00M | 899.83M | 1.23B |
| Total Debt | 4.52B | 4.52B | 3.10B | 3.01B | 3.23B | 4.62B |
| Total Liabilities | 6.75B | 6.75B | 5.64B | 5.68B | 5.77B | 6.97B |
| Stockholders Equity | 7.92B | 7.92B | 7.74B | 7.27B | 6.38B | 5.57B |
Cash Flow | ||||||
| Free Cash Flow | 492.01M | 492.01M | 974.02M | 1.85B | 1.68B | 1.03B |
| Operating Cash Flow | 1.07B | 1.07B | 1.47B | 2.23B | 2.04B | 1.36B |
| Investing Cash Flow | -1.81B | -1.81B | -580.04M | -989.18M | -386.75M | -334.92M |
| Financing Cash Flow | 592.41M | 592.41M | -911.51M | -1.35B | -1.95B | -536.74M |
Sonic Healthcare Technical Analysis
Negative
14.21
Price Trends
16.07
Negative
16.49
Negative
16.46
Negative
Market Momentum
-0.53
Negative
32.23
Neutral
25.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKHHY, the sentiment is Negative. The current price of 14.21 is below the 20-day moving average (MA) of 14.66, below the 50-day MA of 16.07, and below the 200-day MA of 16.46, indicating a bearish trend. The MACD of -0.53 indicates Negative momentum. The RSI at 32.23 is Neutral, neither overbought nor oversold. The STOCH value of 25.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKHHY.
Sonic Healthcare Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $20.36B | 22.79 | 13.13% | 1.70% | 12.58% | 13.00% | |
70 Outperform | $10.03B | 26.15 | 10.65% | 2.71% | 5.15% | 412.41% | |
69 Neutral | $6.93B | 20.16 | 6.18% | 4.42% | 8.13% | -1.78% | |
66 Neutral | $10.65B | 37.19 | 3.78% | 0.31% | 3.33% | 32.86% | |
66 Neutral | $15.72B | 12.95 | 48.27% | ― | -3.32% | ― | |
56 Neutral | $8.39B | -128.69 | -2.06% | ― | -1.21% | -115.44% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SKHHY
Sonic Healthcare
14.21
-3.75
-20.88%
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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.