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Smith & Nephew Snats (SNN)
NYSE:SNN
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Smith & Nephew Snats
(NYSE:SNN)
Rating:76Outperform
Price Target:
$40.00
▲(10.41% Upside)
Positive Factors
Earnings Performance
SNN delivered a solid Q1 overall, slightly beating consensus and maintaining its guidance through the P&L.
Market Growth
SNN reported growth in other emerging markets at +14.7%, showing strong performance outside of China.
Negative Factors
China Market Challenges
China remains a key hurdle in Ortho and Sports Medicine until mid-year when SNN believes Ortho inventory levels should normalize and Sports Med VBP should lap.
US Market Uncertainty
SNN's ability to return the US Ortho segment to market growth by year-end remains a show-me story.
Smith & Nephew Snats (SNN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.76B
Dividend Yield2.09%
Average Volume (3M)1.13M
Price to Earnings (P/E)31.8
Beta (1Y)0.66
Revenue Growth6.28%
EPS Growth61.96%
CountryUS
Employees17,349
SectorHealthcare
Sector Strength40
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.86
Shares Outstanding437,187,770
10 Day Avg. Volume1,297,278
30 Day Avg. Volume1,129,752
Financial Highlights & Ratios
PEG Ratio-1.21
Price to Book (P/B)2.05
Price to Sales (P/S)1.85
P/FCF Ratio17.78
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue2.69
Enterprise Value/Gross Profit3.84
Enterprise Value/Ebitda11.16
Forecast
1Y Price Target
$37.33Price Target Upside3.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Smith & Nephew Snats Business Overview & Revenue Model
Company DescriptionSmith & Nephew plc, together with its subsidiaries, develops, manufactures, markets, and sells medical devices worldwide. The company offers knee implant products for knee replacement procedures; hip implants for the reconstruction of hip joints; and trauma and extremities products that include internal and external devices used in the stabilization of severe fractures and deformity correction procedures. It also provides sports medicine joint repair products for surgeons, including instruments, technologies, and implants necessary to perform minimally invasive surgery of the joints, such as the repair of soft tissue injuries and degenerative conditions of the knee, hip, and shoulder, as well as meniscal repair systems. In addition, the company offers arthroscopic enabling technologies comprising fluid management equipment for surgical access, high-definition cameras, digital image capture, scopes, light sources, and monitors to assist with visualization inside the joints, radio frequency, electromechanical and mechanical tissue resection devices, and hand instruments for removing damaged tissue; and ear, nose, and throat solutions. Further, it provides advanced wound care products for the treatment and prevention of acute and chronic wounds, which comprise leg, diabetic and pressure ulcers, burns, and post-operative wounds; advanced wound bioactives, including biologics and other bioactive technologies for debridement and dermal repair/regeneration, as well as regenerative medicine products including skin, bone graft, and articular cartilage substitutes; and advanced wound devices, such as traditional and single-use negative pressure wound therapy, and hydrosurgery systems. It primarily serves the healthcare providers. Smith & Nephew plc was founded in 1856 and is headquartered in Watford, the United Kingdom.
How the Company Makes MoneySmith & Nephew Snats generates revenue through multiple streams, primarily from the sale of medical devices and advanced wound care products. The company has a diverse portfolio that includes high-margin products in its orthopedics and wound management segments, which contribute significantly to overall sales. Additionally, SNN benefits from ongoing partnerships with healthcare providers and institutions, ensuring a steady demand for its products. The company also engages in research and development initiatives to innovate and expand its product lines, further driving revenue growth. Strategic collaborations with hospitals and surgical centers enhance market penetration and access to new customer bases, supporting its earnings potential.
Smith & Nephew Snats Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue contributions from different business units, indicating which segments are leading growth and how diversified the company's income streams are.
Analyzes revenue contributions from different business units, indicating which segments are leading growth and how diversified the company's income streams are.
Data provided by:
Main Street Data
Main Street DataSmith & Nephew Snats Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: 17.67%|
Next Earnings Date:Feb 24, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth across various segments, impressive profitability improvements, and a strategic share buyback plan. However, challenges remain in emerging markets, particularly China, and tariff impacts are a concern. Additionally, there are specific segment challenges such as the softness in the U.S. Knee segment and potential changes in the skin substitutes market.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Smith & Nephew reported a 6.7% underlying revenue growth in Q2, with a 7.8% growth when accounting for foreign exchange. The U.S. market grew 8.7%, and emerging markets excluding China grew by 12.2%.
Profitability and Margin Expansion
The company achieved a 100 basis points expansion in the first half trading margin, slightly ahead of expectations, with a full year margin guidance of 19% to 20%.
Free Cash Flow and Share Buyback
Smith & Nephew reported a 70% increase in trading cash flow, generating almost $250 million of free cash flow in the first half. They announced a $500 million share buyback in the second half of 2025.
Orthopaedics and Robotic Growth
Orthopaedics showed a 5.5% underlying growth. The U.S. Recon and Robotics segment sustained its recent improvement, marking the fourth quarter of sequential growth.
Advanced Wound Management Growth
Advanced Wound Management recorded a 10.2% growth, with Advanced Wound Devices growing by 12.7%, led by the PICO single-use negative pressure platform.
Negative Updates
Emerging Markets Decline
Emerging markets saw a 0.2% decline, largely due to the impacts of volume-based procurement in China.
Tariff Challenges
Smith & Nephew anticipates a net headwind of about $15 million to $20 million in 2025 due to tariff impacts.
U.S. Knee Segment Softness
The U.S. Knee growth was soft, partly due to a slowing in procedures and strategic actions to streamline the portfolio.
Skin Substitutes Market Changes
Proposed updates to Medicare reimbursement for skin substitutes could be a headwind to Advanced Wound Management sales and profitability in 2026.
Company Guidance
In the Smith & Nephew second quarter call, CEO Deepak Nath and CFO John Rogers provided extensive guidance on the company's performance and future outlook. They reported a 6.7% underlying revenue growth, with a total revenue of $1.6 billion for the quarter, and a 7.8% growth on a reported basis. The U.S. market saw an 8.7% growth, while other established markets grew by 7.4%. The trading margin expanded by 100 basis points in the first half, slightly exceeding expectations, with a full-year margin guidance of 19% to 20%. This includes a net headwind from tariffs estimated at $15 million to $20 million. The company achieved a 70% increase in trading cash flow and generated nearly $250 million in free cash flow during the first half. A $500 million share buyback was announced, to be funded by 2025 cash flow and existing balances. The call highlighted strategic improvements across business units, including a 5.5% growth in Orthopaedics and a 10.2% growth in Advanced Wound Management. Additionally, they outlined operational efficiencies, such as reduced inventory days and lower restructuring charges, contributing to a robust cash position and enabling the share buyback.Smith & Nephew Snats Financial Statement Overview
Summary
Smith & Nephew Snats demonstrates strong financial health with impressive revenue and profit growth, solid profitability margins, and efficient cash flow management. Despite a slight increase in leverage, the company's balanced capital structure and improved returns to shareholders position it well in the Medical Equipment & Supplies industry.Income Statement
Smith & Nephew Snats has shown consistent revenue growth with a notable increase of 4.7% from 2023 to 2024. The gross profit margin stands strong at 69.6%, highlighting effective cost management. The net profit margin improved significantly from 4.7% in 2023 to 7.1% in 2024, demonstrating enhanced profitability. EBIT and EBITDA margins increased to 11.3% and 21.3% respectively, reflecting operational efficiency improvements.85
Very Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 50.8% in 2024, indicating a balanced capital structure. However, the debt-to-equity ratio increased slightly to 0.63, suggesting a cautious approach to leverage. ROE improved to 7.8%, signifying better returns to shareholders, driven by increased net income.78
Positive
Cash Flow
Smith & Nephew Snats experienced a robust free cash flow growth of 234.8%, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 2.40 reflects efficient cash management. The free cash flow to net income ratio of 1.47 further supports the company’s strong cash flow position.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.97B | 5.81B | 5.55B | 5.21B | 5.21B | 4.56B |
| Gross Profit | 4.18B | 4.05B | 3.82B | 3.67B | 3.67B | 3.16B |
| EBITDA | 1.44B | 1.24B | 979.00M | 943.00M | 1.24B | 866.00M |
| Net Income | 493.64M | 412.00M | 263.00M | 223.00M | 524.00M | 448.00M |
Balance Sheet | ||||||
| Total Assets | 10.68B | 10.35B | 9.99B | 9.97B | 10.92B | 11.01B |
| Cash, Cash Equivalents and Short-Term Investments | 675.41M | 619.00M | 302.00M | 350.00M | 1.29B | 1.76B |
| Total Debt | 3.45B | 3.32B | 3.08B | 2.87B | 3.34B | 3.69B |
| Total Liabilities | 5.15B | 5.09B | 4.77B | 4.71B | 5.35B | 5.73B |
| Stockholders Equity | 5.53B | 5.26B | 5.22B | 5.26B | 5.57B | 5.28B |
Cash Flow | ||||||
| Free Cash Flow | 799.32M | 606.00M | 181.00M | 110.00M | 469.00M | 492.00M |
| Operating Cash Flow | 1.15B | 987.00M | 608.00M | 468.00M | 877.00M | 935.00M |
| Investing Cash Flow | -345.22M | -569.00M | -448.00M | -472.00M | -691.00M | -606.00M |
| Financing Cash Flow | -676.96M | -86.00M | -200.00M | -926.00M | -645.00M | 1.16B |
Smith & Nephew Snats Technical Analysis
Positive
36.23
Price Trends
30.85
Positive
29.22
Positive
27.43
Positive
Market Momentum
1.56
Negative
76.90
Negative
92.85
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 36.23 is above the 20-day moving average (MA) of 32.35, above the 50-day MA of 30.85, and above the 200-day MA of 27.43, indicating a bullish trend. The MACD of 1.56 indicates Negative momentum. The RSI at 76.90 is Negative, neither overbought nor oversold. The STOCH value of 92.85 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $23.80B | 36.63 | 9.73% | 0.94% | 2.47% | 63.68% | |
78 Outperform | $8.36B | 23.88 | 8.62% | ― | 17.43% | 775.48% | |
77 Outperform | $21.80B | 94.23 | 19.18% | ― | 25.99% | -40.46% | |
76 Outperform | $20.17B | 24.79 | 6.52% | 0.94% | 4.11% | -14.43% | |
76 Outperform | $15.76B | 31.81 | 9.20% | 2.09% | 6.28% | 61.96% | |
56 Neutral | $25.54B | ― | -7.10% | 3.28% | -0.76% | -55.03% | |
51 Neutral | $7.41B | -0.29 | -44.86% | 2.30% | 23.46% | -0.02% |
* Healthcare Sector Average
Performance Comparison
SNN
Smith & Nephew Snats
36.23
7.35
25.45%
PODD
Insulet
309.63
115.04
59.12%
PHG
Koninklijke Philips
26.99
-0.66
-2.39%
STE
Steris
243.76
12.28
5.30%
ZBH
Zimmer Biomet Holdings
101.82
-6.49
-5.99%
GMED
Globus Medical
61.87
-5.45
-8.10%
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.