Solventum Corporation (SOLV) AI Stock Analysis

• Market Cap: $12.29B
• Dividend Yield: N/A
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.62
• Revenue Growth: 2.53%
• EPS Growth: 109.91%
• Country: US
• Employees: 22,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 1.57
• Shares Outstanding: 173,493,010
• 10 Day Avg. Volume: 1,260,089
• 30 Day Avg. Volume: 1,087,308
• PEG Ratio: 0.04
• Price to Book (P/B): 2.73
• Price to Sales (P/S): 1.66
• P/FCF Ratio: -1.38K
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 1.97
• Enterprise Value/Gross Profit: 3.69
• Enterprise Value/Ebitda: 5.85
• 1Y Price Target: $95.33
• Price Target Upside: 35.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 6.48
• Revenue Forecast (FY): $8.16B

• Rating: 55 Neutral
• Price Target: $79.00 ▲(12.22% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is held back primarily by weakened and volatile recent fundamentals—especially the sharp drop in operating cash flow and negative free cash flow in 2025—despite margin recovery. Valuation is a relative positive given the low P/E, while technical signals are mixed and the earnings call supports modest growth/margin improvement but with meaningful near-term execution and cost headwinds.

Positive Factors

Portfolio reshaping and capital allocation progress

Management executed meaningful portfolio moves (P&F sale, Acera buy) and used proceeds to pay down debt and initiate a $1B repurchase. These actions materially improve capital structure and signal disciplined capital allocation that can lower financing risk and enhance shareholder returns long term.

Health IT competitive advantage with AI

Solventum’s HIS business has durable differentiation: large rule sets and datasets underpin autonomous coding and RCM offerings. This structural IP and AI adoption can drive recurring, higher-margin software/service revenue and strengthen customer stickiness over multiple years.

Margin recovery and sustained profitability

Solventum’s underlying margins recovered to attractive levels in 2025 (net ~18.7%, EBITDA ~26%), reflecting durable cost structure and pricing power across MedSurg, Dental and HIS. Sustained margins support cash generation and reinvestment capacity if revenue stability returns.

Negative Factors

Elevated leverage and interest exposure

Net leverage remains substantial post-divestiture, keeping interest costs and refinancing sensitivity elevated. High fixed financing charges reduce margin tailwinds from operational improvements and limit flexibility to absorb tariff, separation or ERP-related costs over the next 2–3 years.

Revenue volatility from portfolio actions

Reported revenue swung materially due to divestitures, acquisitions and SKU rationalization, producing extreme volatility in 2025. Such structural shifts make forecasting and scale economics harder to predict and can disrupt commercial momentum and supply-chain leverage for several quarters.

Sharp deterioration in cash generation

Operating cash conversion collapsed in 2025, with FCF turning marginally negative. Persistently weak cash generation reduces financial flexibility for capex, M&A or buybacks, increases reliance on external funding, and elevates execution risk during multi-year transformation programs.

Solventum Corporation Business Overview & Revenue Model

Company Description

Solventum Corporation, a healthcare company, engages in the developing, manufacturing, and commercializing a portfolio of solutions to address critical customer and patient needs. It operates through four segments: Medsurg, Dental Solutions, Health Information Systems, and Purification and Filtration. The Medsurg segment is a provider of solutions including advanced wound care, I.V. site management, sterilization assurance, temperature management, surgical supplies, stethoscopes, and medical electrodes. The Dental Solutions segment provides a comprehensive suite of dental and orthodontic products including brackets, aligners, restorative cements, and bonding agents. The Health Information Systems provides software solutions including computer-assisted, physician documentation, direct-to-bill and coding automation, classification methodologies, speech, recognition, and data visualization platforms. The Purification and Filtration segment provides purification and filtration technologies including filters, purifiers, cartridges, and membranes. The company was incorporated in 2023 and is based in Saint Paul, Minnesota.

How the Company Makes Money

Solventum Corporation generates revenue primarily through the sale of its specialty chemicals and solvents to various sectors, including pharmaceuticals, automotive, and manufacturing. The company employs a direct sales model, establishing long-term relationships with customers who require tailored chemical solutions. Key revenue streams include bulk sales of solvents, licensing of proprietary technology, and consulting services for chemical applications. Additionally, Solventum benefits from strategic partnerships with industry leaders, allowing for collaborative product development and expanded market reach, which further enhances its earnings potential.

Solventum Corporation Financial Statement Overview

Summary

Profitability has been solid historically and margins rebounded in 2025, but the latest period shows a major reported revenue disruption and a sharp deterioration in cash generation (including slightly negative free cash flow and weak cash conversion). Balance-sheet leverage improved versus 2024, yet overall volatility in revenue, leverage, and cash flow keeps risk elevated.

Income Statement

Revenue has been broadly stable from 2021–2024 (low single-digit growth), but 2025 shows a sharp revenue decline (reported growth of -91.6%), which materially raises reliability/volatility concerns. Profitability was strong in 2021–2023 (net margins ~16–18% and EBITDA margins ~27–30%), weakened in 2024 (net margin ~5.8%), and then rebounded in 2025 (net margin ~18.7% and EBITDA margin ~26.2%). Overall: attractive underlying margins, but the large 2025 revenue dislocation and 2024 earnings compression keep the score in the mid-range.

Balance Sheet

Leverage and capital structure look inconsistent year-to-year. Debt rose meaningfully in 2023–2024 (debt-to-equity ~0.71 in 2023 and ~2.71 in 2024), then improved in 2025 (~1.0) as debt fell and equity increased. Returns on equity are healthy (roughly ~11–31% across the period), but the swing in leverage/equity levels suggests elevated balance-sheet volatility and potential risk around funding structure compared with a steadier profile.

Cash Flow

Cash generation deteriorated sharply in the latest period. Operating cash flow fell from ~$1.7–$2.2B (2021–2023) to ~$1.2B (2024) and then to just ~$0.37B (2025). Free cash flow turned slightly negative in 2025 (-$0.01B) after being solidly positive in prior years (e.g., ~$1.6B in 2023 and ~$0.8B in 2024). Cash conversion also weakened substantially: operating cash flow relative to net income dropped to ~0.12 in 2025 (vs. >1.0 in 2021–2023), and free cash flow relative to net income turned negative in 2025—raising concerns about earnings quality and near-term funding flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.32B	8.25B	8.20B	8.13B	8.17B
Gross Profit	4.45B	4.59B	4.69B	4.70B	4.92B
EBITDA	2.55B	1.53B	2.23B	2.27B	2.48B
Net Income	1.56B	479.00M	1.35B	1.34B	1.46B
Balance Sheet
Total Assets	14.29B	14.46B	13.94B	13.59B	14.07B
Cash, Cash Equivalents and Short-Term Investments	878.00M	762.00M	194.00M	61.00M	91.00M
Total Debt	5.04B	8.01B	8.30B	0.00	0.00
Total Liabilities	9.24B	11.50B	2.28B	1.85B	2.02B
Stockholders Equity	5.05B	2.96B	11.67B	11.74B	12.06B
Cash Flow
Free Cash Flow	-10.00M	805.00M	1.63B	1.43B	1.93B
Operating Cash Flow	369.00M	1.19B	1.92B	1.68B	2.20B
Investing Cash Flow	2.80B	-380.00M	-230.00M	-253.00M	-278.00M
Financing Cash Flow	-3.06B	-240.00M	-1.55B	-1.46B	-1.96B

Solventum Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 70.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOLV, the sentiment is Negative. The current price of 70.4 is below the 20-day moving average (MA) of 75.24, below the 50-day MA of 78.21, and below the 200-day MA of 75.40, indicating a bearish trend. The MACD of -1.76 indicates Positive momentum. The RSI at 34.85 is Neutral, neither overbought nor oversold. The STOCH value of 9.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOLV.

Solventum Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UHS	74 Outperform	$12.51B	9.31	21.36%	0.35%	10.21%	39.58%
EHC	73 Outperform	$10.74B	18.84	25.11%	0.65%	11.13%	27.53%
THC	69 Neutral	$21.29B	12.83	33.54%	―	-0.56%	-53.50%
DVA	63 Neutral	$10.34B	10.44	―	―	5.14%	4.37%
FMS	60 Neutral	$13.35B	12.07	7.27%	3.29%	4.09%	13.17%
SOLV	55 Neutral	$12.29B	8.87	38.86%	―	2.53%	109.91%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Solventum Corporation Corporate Events

Solventum Corporation Reflects on Transformative Year

On December 16, 2025, Solventum Corporation reflected on a transformative year, highlighting significant progress as a standalone public company. The company launched a long-range plan prioritizing growth drivers, achieved six consecutive quarters of positive volume growth, and outperformed financial expectations. Solventum’s commercial restructuring and enhancements led to strong results in MedSurg and Dental Solutions, while its Health Information Systems maintained a leading position in AI-powered healthcare. The company also focused on sustainable margin expansion through its ‘Transform for the Future’ initiative, which includes operational efficiencies and supply chain separation. Strategic transformations included the sale of its Purification & Filtration business and the acquisition of Acera Surgical, alongside a $1 billion share repurchase program. These efforts are supported by a dedicated global team, contributing to Solventum’s recognition and confidence in its long-term potential.

The most recent analyst rating on (SOLV) stock is a Hold with a $86.00 price target. To see the full list of analyst forecasts on Solventum Corporation stock, see the SOLV Stock Forecast page.