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Smith & Nephew Snats (SNN)
NYSE:SNN
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Smith & Nephew Snats
(NYSE:SNN)66Neutral
Positive Factors
Earnings
SNN posted an encouraging Q4 with top line beating expectations as US Recon performance trended in the right direction and SNN saw +23.9% growth in Other Recon with a record quarter of CORI placements.
Negative Factors
China Market
China remained a headwind to the tune of 280bps on group underlying revenue growth as VBP impacts on Sports Med and reduced distributor inventory purchasing in Recon persisted.
Guidance
SNN posted a challenged Q as it missed revenue expectations, lowered its 2024 top line and margin guidance, and also lowered its 2025 margin guidance.
Smith & Nephew Snats (SNN) vs. S&P 500 (SPY)
Market Cap
$12.74B
Dividend Yield2.44%
Average Volume (3M)692.21K
Price to Earnings (P/E)30.7
Beta (1Y)0.72
Revenue Growth2.60%
EPS Growth37.89%
CountryUS
Employees18,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)0.94
Shares Outstanding437,198,030
10 Day Avg. Volume878,906
30 Day Avg. Volume692,210
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)N/A
Price to Sales (P/S)2.26
Price to Cash Flow (P/CF)26.80
P/FCF Ratio47.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.47Price Target Upside-5.10% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Smith & Nephew Snats Business Overview & Revenue Model
Company DescriptionSmith & Nephew Snats (SNN) is a leading global medical technology company that specializes in the design, manufacture, and marketing of medical devices and advanced wound management products. Operating in sectors such as Orthopaedics, Sports Medicine & ENT, and Advanced Wound Management, SNN provides innovative solutions that improve the quality of life for patients worldwide. The company's core products include joint replacement systems, arthroscopy products, trauma devices, and a comprehensive range of wound care products.
How the Company Makes MoneySmith & Nephew Snats generates revenue primarily through the sale of its medical devices and products across its three main sectors: Orthopaedics, Sports Medicine & ENT, and Advanced Wound Management. In the Orthopaedics sector, SNN earns money from the sale of joint replacement systems, trauma devices, and related surgical instruments. The Sports Medicine & ENT sector contributes to revenue through the sale of arthroscopy products, minimally invasive surgery solutions, and ENT technologies. The Advanced Wound Management sector provides revenue from the sale of products designed for wound care, including dressings and negative pressure wound therapy. Key revenue streams include direct sales to hospitals, healthcare providers, and distributors. Additionally, Smith & Nephew Snats may engage in strategic partnerships, licensing agreements, and collaborations that further enhance its market presence and revenue opportunities.
Smith & Nephew Snats Financial Statement Overview
Summary
Smith & Nephew Snats exhibits a stable financial position with consistent revenue growth and strong cash flow generation. The company’s balance sheet is well-managed with moderate leverage and a healthy equity base. However, profitability margins and ROE could be improved to enhance shareholder value.Income Statement
Smith & Nephew Snats has demonstrated a steady revenue growth with a 6.40% increase from the previous year. The gross profit margin in the latest year is robust at approximately 68.82%, indicating strong production efficiency. However, the net profit margin is relatively low at 4.74%, suggesting room for improvement in cost management and operational efficiency. There is a noticeable decline in EBIT and EBITDA margins, which could indicate increased operational costs or pricing pressures.75
Positive
Balance Sheet
The company maintains a balanced financial structure with a debt-to-equity ratio of 0.59, showcasing manageable leverage levels. The equity ratio stands at 52.23%, reflecting a solid equity base. Return on equity (ROE) is somewhat modest at 5.04%, pointing towards potential inefficiencies in utilizing shareholder funds. Overall, the balance sheet demonstrates stability and prudent financial management.80
Positive
Cash Flow
Operating cash flow has shown an improvement, suggesting enhanced operational cash generation. The free cash flow growth rate is substantial at 64.55%, which is a positive indicator for the company’s liquidity and ability to finance operations and investments. However, the operating cash flow to net income ratio is at 2.31, indicating a strong cash generation capability relative to net income.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.64B | 5.55B | 5.21B | 5.21B | 4.56B | 5.14B | Gross Profit |
| 3.97B | 3.82B | 3.69B | 3.70B | 3.18B | 3.81B | EBIT |
| 735.00M | 425.00M | 665.00M | 712.00M | 433.00M | 981.00M | EBITDA |
| 1.06B | 979.00M | 1.00B | 1.22B | 839.00M | 1.43B | Net Income Common Stockholders |
| 305.00M | 263.00M | 223.00M | 524.00M | 448.00M | 600.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 302.00M | 302.00M | 350.00M | 1.29B | 1.76B | 277.00M | Total Assets |
| 9.99B | 9.99B | 9.97B | 10.92B | 11.01B | 9.30B | Total Debt |
| 3.08B | 3.08B | 2.87B | 3.34B | 3.69B | 2.05B | Net Debt |
| 2.78B | 2.78B | 2.52B | 2.05B | 1.93B | 1.77B | Total Liabilities |
| 4.77B | 4.77B | 4.71B | 5.35B | 5.73B | 4.16B | Stockholders Equity |
| 5.22B | 5.22B | 5.26B | 5.57B | 5.28B | 5.14B |
| Cash Flow | Free Cash Flow | ||||
| 301.00M | 181.00M | 110.00M | 469.00M | 492.00M | 760.00M | Operating Cash Flow |
| 733.00M | 608.00M | 468.00M | 877.00M | 935.00M | 1.17B | Investing Cash Flow |
| -626.00M | -448.00M | -472.00M | -691.00M | -606.00M | -1.25B | Financing Cash Flow |
| 258.00M | -200.00M | -926.00M | -645.00M | 1.16B | 7.00M |
Smith & Nephew Snats Technical Analysis
Positive
30.00
Price Trends
25.55
Positive
26.02
Positive
27.07
Positive
Market Momentum
1.12
Negative
82.14
Negative
94.80
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNN, the sentiment is Positive. The current price of 30 is above the 20-day moving average (MA) of 26.64, above the 50-day MA of 25.55, and above the 200-day MA of 27.07, indicating a bullish trend. The MACD of 1.12 indicates Negative momentum. The RSI at 82.14 is Negative, neither overbought nor oversold. The STOCH value of 94.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNN.
Smith & Nephew Snats Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $148.79B | 50.24 | 14.51% | 0.82% | 10.23% | -5.74% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
71 Outperform | $20.70B | 23.46 | 7.25% | 0.91% | 3.84% | -9.29% | |
66 Neutral | $12.74B | 30.68 | 5.04% | 2.44% | 2.60% | 37.89% | |
54 Neutral | $17.80B | 136.07 | -4.48% | 2.64% | -14.00% | -184.82% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
SNN
Smith & Nephew Snats
30.00
3.30
12.36%
BAX
Baxter International
34.79
-7.08
-16.91%
JNJ
Johnson & Johnson
165.42
11.03
7.14%
MDT
Medtronic
93.03
10.31
12.46%
SYK
Stryker
389.92
38.16
10.85%
ZBH
Zimmer Biomet Holdings
103.99
-20.77
-16.65%
Smith & Nephew Snats Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 14.16% | Next Earnings Date: Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong growth in key areas, successful execution of strategic plans, and innovation leading to significant revenue contributions. While challenges persist in the China market and in managing R&D investments and cost pressures in Orthopedics, the overall outlook remains optimistic with anticipated improvements in 2025.Highlights
Strong Year-End Performance
Q4 2024 saw an 8.3% underlying revenue growth with particularly strong performance in the US at 11.9% growth.
Successful Execution of 12-Point Plan
The 12-Point Plan is driving operational improvements, product innovation, and financial outcomes with 60 basis points of margin expansion and 95% cash conversion in 2024.
Record Installations of CORI Robotics
CORI robotic systems exceeded 1,000 global installations by year-end, with a record number of new placements in Q4 2024.
Advanced Wound Management Growth
The Advanced Wound Management segment delivered 12.2% growth in Q4, driven by bioactives and devices.
Innovation Driving Revenue
Over 60% of revenue growth in 2024 came from products launched in the last five years.
Lowlights
China Market Challenges
China posed a headwind, costing 280 basis points of group growth in Q4, with continued headwinds expected in 2025.
Joint Repair and Sports Medicine VBP Impact
Volume-based procurement (VBP) in China impacted Joint Repair, with a more than 10 percentage point headwind, and similar effects expected for Arthroscopic Enabling Technologies (AET) in 2025.
R&D Spending Concerns
Despite plans for continued innovation, R&D spending was slightly lower than expected due to efficiency savings.
Orthopedics Margin Pressure
Orthopedics segment faced margin pressure due to input cost inflation, merit increases, and China VBP pricing.
Company Guidance
In the Q4 and full year 2024 results presentation, Smith & Nephew's CEO, Deepak Nath, and CFO, John Rogers, provided detailed guidance for 2025. They reported an 8.3% underlying growth in Q4 and a 60 basis points margin expansion for the year. The company achieved 95% cash conversion and a 1.4% increase in ROIC. For 2025, Smith & Nephew expects around 5% revenue growth and a significant trading margin expansion to between 19% and 20%. The margin growth will be driven by continued operating leverage and cost savings from optimizing the manufacturing network. The guidance also accounts for potential headwinds from China, which cost the company 280 basis points of group growth in Q4 2024. Despite these challenges, the company remains confident in its outlook, emphasizing a commitment to innovation and operational improvements under its 12-Point Plan.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.