Solventum Corporation (SOLV) AI Stock Analysis

• Market Cap: $11.65B
• Dividend Yield: N/A
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.66
• 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: 1,369,654
• 30 Day Avg. Volume: 1,223,085
• 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: 1.38
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: 5.72
• 1Y Price Target: $95.33
• Price Target Upside: 41.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 6.48
• Revenue Forecast (FY): $8.15B

• Rating: 55 Neutral
• Price Target: $68.00 ▲(1.28% 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

Margin recovery and guided expansion

Sustained operating margins around 20% reflect durable underlying profitability from consumables and services. Management’s 21.0%–21.5% guidance, plus multiyear Transform for the Future cost program, implies structural margin improvement via supply‑chain savings and operating leverage over 2026–2027.

Diversified product mix and innovation pipeline

A broad mix of recurring consumables, devices and health‑IT subscriptions reduces single‑market dependence and supports durable revenue. The innovation pipeline plus HIS AI capabilities (large proprietary rules/datasets) underpin sustainable product adoption and cross‑sell opportunities over multiple years.

Active portfolio reshaping and capital allocation

Divesting noncore assets and funding targeted M&A demonstrates disciplined capital allocation: reduces legacy exposure, funds strategic growth (Acera) and returns capital. Debt paydown materially improved capital structure, supporting long‑term financial flexibility if operating cash recovery continues.

Negative Factors

Material cash‑flow deterioration

A sharp drop in operating cash and negative FCF materially weakens the company’s internal funding for capex, separation costs and debt service. Even if some items are one‑offs, persistent weak cash conversion raises risk to investment plans and increases reliance on external funding or asset sales.

Revenue volatility from portfolio actions

Large reported top‑line swings driven by divestitures and acquisitions reduce predictability of core organic growth. Structural SKU rationalization and category exits can depress near‑term volume and complicate scaling benefits, making multi‑period forecasting and investment planning more uncertain.

Elevated net leverage and interest exposure

Despite recent paydown, absolute net debt and sizable interest expense leave the company exposed to cash‑flow shocks and tariff or raw‑material headwinds. Continued leverage constrains discretionary investment and raises execution risk if operating cash generation does not rebound as planned.

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 primarily makes money by selling healthcare products and solutions to hospitals, clinics, dental practices, and other healthcare customers. Key revenue streams include (1) sales of medical and dental consumables and devices (e.g., single-use or recurring-use products purchased routinely by providers), and (2) revenue from health information and healthcare operations solutions, which may include software and related services sold under subscription, license, and/or service arrangements depending on the offering. Earnings are influenced by customer demand across healthcare end markets, ongoing purchasing cycles for consumables, adoption and renewals of software/workflow offerings, pricing and product mix, and distribution through direct sales and channel partners. Specific material partnerships or customer concentration details: null.

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: 67.14
• 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 67.14 is below the 20-day moving average (MA) of 71.29, below the 50-day MA of 76.23, and below the 200-day MA of 75.19, indicating a bearish trend. The MACD of -2.73 indicates Positive momentum. The RSI at 32.00 is Neutral, neither overbought nor oversold. The STOCH value of 15.45 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
EHC	70 Outperform	$10.08B	18.84	24.48%	0.65%	11.13%	27.53%
THC	69 Neutral	$19.07B	12.83	34.82%	―	-0.56%	-53.50%
UHS	66 Neutral	$11.82B	9.31	21.03%	0.35%	10.21%	39.58%
DVA	63 Neutral	$9.90B	10.44	-160.63%	―	5.14%	4.37%
FMS	60 Neutral	$13.33B	12.07	7.13%	3.29%	4.09%	13.17%
SOLV	55 Neutral	$11.65B	8.87	36.74%	―	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.