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Demant (WILYY)
OTHER OTC:WILYY
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Demant
(OTC:WILYY)
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Rating:53Neutral
Price Target:
$15.00
▼(-12.89% Downside)
Action:ReiteratedDate:02/09/26
Overall score is pulled down primarily by weak technicals (price below key moving averages with negative momentum) and increased leverage alongside softer profitability. Offsetting this are solid cash generation and a defined 2026 improvement plan (cost savings and acquisition-driven EBIT contribution), though valuation remains only moderate given the P/E and current margin/FX pressures.
Positive Factors
High gross margins
A sustained gross margin around 75.6% indicates durable product economics and structural pricing power in core hearing-aid products and instruments. High gross margins give the company room to absorb SG&A, fund R&D and support margin recovery even if ASPs or mix shift temporarily.
Strong cash generation
Consistently high free-cash-flow conversion (~84% of net income) and multi-billion DKK FCF provide a durable source for deleveraging, capex, and integration funding. Even with a modest FCF decline, strong conversion supports strategic flexibility and funds the 2026 cost program.
Expanded hearing-care footprint (KIND)
Closing KIND materially increases retail scale (Germany leadership), broadens recurring service revenues and clinic reach, and adds predictable EBIT contribution. The acquisition strengthens market position and cross-sell potential, supporting structurally higher recurring margins over coming years.
Negative Factors
Elevated leverage
Material rise in net debt and a 3.4x gearing level reduces financial flexibility and raises refinancing risk. Management paused buybacks to prioritize deleveraging, which constrains capital allocation and increases vulnerability to prolonged margin shortfalls or adverse FX movements.
Weakened operating profitability
Significant margin compression reflects higher operating costs, adverse mix/ASP effects and one-offs; this reduces the company's ability to convert revenue into sustainable operating earnings. Restoring margins requires successful execution of cost programs and stable top-line trends.
Market softness & competitive pressure
Structural channel shifts and intensified competition (large retailers expanding suppliers, low-price in-ear launches) pressure ASPs and share in key markets like the U.S. Persistent share loss or sustained pricing pressure would constrain long-term revenue growth and margin recovery.
Demant (WILYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.03B
Dividend YieldN/A
Average Volume (3M)4.00
Price to Earnings (P/E)28.5
Beta (1Y)0.86
Revenue Growth1.28%
EPS Growth-1.99%
CountryUS
Employees19,917
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.16
Shares Outstanding427,589,320
10 Day Avg. Volume0
30 Day Avg. Volume4
Financial Highlights & Ratios
PEG Ratio-0.80
Price to Book (P/B)4.48
Price to Sales (P/S)1.92
P/FCF Ratio13.87
Enterprise Value/Market Cap10.26
Enterprise Value/Revenue2.69
Enterprise Value/Gross Profit3.56
Enterprise Value/Ebitda11.53
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Demant Business Overview & Revenue Model
Company DescriptionDemant A/S, a hearing healthcare and audio technology company, develops, manufactures, and sells products and equipment to enhance people's hearing in Europe, North America, the Pacific, Asia, and internationally. It operates in two segments, Hearing Healthcare and Communications. The Hearing Healthcare segment offers hearing implants and aids, hearing care, and diagnostic products. The Communications segment provides headsets for collaborative work and gaming markets under the EPOS brand name. The company was formerly known as William Demant Holding A/S and changed its name to Demant A/S in March 2019. Demant A/S was founded in 1904 and is headquartered in Smørum, Denmark.
How the Company Makes MoneyDemant generates revenue primarily through the sale of hearing aids and audiological equipment, which form the cornerstone of its business model. The company operates in multiple segments including Hearing Aids, Audiometric Equipment, and Personal Communication. Key revenue streams include direct sales to consumers, partnerships with hearing care professionals, and distribution agreements with various healthcare providers. Additionally, Demant benefits from ongoing relationships with audiology clinics and retailers that facilitate the distribution of its products. The company also invests in research and development, leading to innovative products that enhance sales and customer loyalty, contributing to its overall profitability.
Demant Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Neutral
Balanced message: the company delivered solid cash generation, successful product launches (Zeal) and an acquisition that strengthens its Hearing Care footprint, while presenting a clear 2026 growth and profitability roadmap. At the same time, near-term profitability is pressured by a softer hearing aid market (especially in the U.S.), ASP/headwind mix effects, FX impacts, elevated leverage after the KIND acquisition, and planned restructuring/special items. Management expects the cost program and KIND contribution to support margin recovery in 2026, but risks (market softness, competitive pressure and FX) remain.Q4-2025 Updates
Positive Updates
Group revenue and growth momentum
Full-year 2025 organic growth of 2% (5% in local currencies); second half organic growth improved to 4%, showing sequential recovery across all three business areas.
Strong cash generation
Full-year cash flow from operations DKK 3.85 billion and free cash flow above DKK 3.0 billion; H2 cash flow from operations DKK 2.3 billion and H2 free cash flow ~DKK 2.0 billion.
KIND acquisition expands Hearing Care footprint
Acquisition of the KIND Group closed in December 2025, significantly expanding position in Germany (expected #1 in Hearing Care) and expected to contribute ~DKK 300 million to EBIT before special items in 2026 (11 months ~DKK 275 million in modelling).
Successful product launch — Oticon Zeal
Oticon Zeal (launched Oct 2025 in selected markets) received very positive feedback, lifted sales in the first four European markets, increased uptake among first-time users and also boosted sales of other portfolio products; rollout progressing (U.S. launched, Canada and France upcoming).
Hearing Care and Diagnostics Q4 strength
Hearing Care: Q4 local currency revenue up 17% and organic growth ~5% in the quarter (tailwind from one month of KIND); Diagnostics: Q4 organic growth of 8% in local currencies and strong performance in U.K., Germany, U.S./Canada (driven by services and consumables) and Australia (instruments).
Clear 2026 financial targets and profitability program
2026 guidance: organic growth 3%–6% and EBIT before special items DKK 4.1–4.5 billion. Company-wide cost initiative expected to deliver ~DKK 250 million EBIT impact in 2026 and ~DKK 500 million from 2028 onward.
Sustainability and people metrics
Improved lives reached 12 million persons; scope 1 & 2 GHG emissions down 16% vs baseline (target 46% by 2030); gender diversity in top management 33% (target >35% by 2030); near-complete roll-out of people-readiness metrics.
Negative Updates
Profitability pressure and EBIT decline
EBIT before special items for full-year 2025 DKK 3.96 billion with an EBIT margin of 17.2%; management reported EBIT down ~10% (before special items) and H2 EBIT of DKK 2.1 billion, reflecting lower operating leverage.
Gross margin and ASP headwinds
Gross margin contracted (~0.6 percentage points for the full year; ~2.6 percentage points contraction referenced for H2 year-on-year). ASP estimated to be down around 2% in 2025 due to channel and geography mix (e.g., higher share of NHS/France and lower-priced channels).
Market softness and U.S. share loss
Global hearing aid market softer than normal (~2% value growth in 2025 estimated); U.S. market was flat for the year and Demant reported loss of share in the U.S., primarily due to lower sales to a large retailer after supplier expansion.
Elevated leverage after acquisition
Cash out to acquisitions ~DKK 5.4 billion (primarily KIND) led to a significant rise in net debt; gearing multiple ended at 3.4x, above the medium-to-long-term target of 2.0–2.5% and prompting a pause on share buybacks to prioritize deleveraging (aim to return to target within 18–24 months).
Special items and restructuring costs
Special items of DKK 128 million in H2 2025; planned special items for 2026 total ~DKK 325 million (DKK 125 million integration costs relating to KIND and ~DKK 200 million one-off restructuring); program affects ~700 people globally (150 within Demant).
FX headwinds
FX was a headwind in 2025 (notably U.S. dollar weakness) and is expected to reduce 2026 EBIT by ~DKK 200 million (impact split evenly between H1 and H2).
Operational cost pressure and OpEx increase
Operating expenses increased ~5% organically in H2 (partly due to low 2024 comparables and a holdback at end of 2024); full-year organic OpEx increased ~3%, limiting margin recovery.
Intense competitive pressure in certain channels
Management flagged intense competition (including large retail channels) and noted competitor in-ear launches in lower price categories; these dynamics contributed to pricing and share challenges, especially in the U.S.
Company Guidance
Demant guided 2026 organic growth of 3–6% and EBIT before special items of DKK 4.1–4.5 billion, based on an assumed global hearing‑aid market growing 2–4% in value; key modeling assumptions include acquisitive growth of 8%, FX of -2% (an FX EBIT headwind of DKK 200m, split H1/H2), an effective tax rate of 23% and a pause of share buybacks while targeting deleveraging from a 3.4% year‑end gearing back to 2–2.5% within 18–24 months. The company expects ~DKK 250m of EBIT improvement from a 2‑year cost program in 2026 (part of DKK 500m run‑rate savings from 2028+), will recognize DKK 325m of special items in 2026 (DKK 125m KIND integration + DKK 200m restructuring, plus a further DKK 100m in 2027), anticipates KIND to contribute roughly DKK 300m (≈DKK 275m on an 11‑month basis) to EBIT, models DKK 25m tariff impact, and plans actions affecting ~700 people in 2026 (150 in Demant) with the majority of savings phased into H2.Demant Financial Statement Overview
Summary
Mixed fundamentals: strong revenue growth and very strong gross margin (~75.6%) plus healthy free-cash-flow conversion (~84% of net income), but profitability weakened (EBIT and net margins down) and balance-sheet leverage increased (debt-to-equity ~2.13; operating cash flow coverage of debt down to ~51%).Income Statement
Revenue expanded strongly in 2025 (+170.9% vs. 2024), but profitability weakened materially: net margin fell to ~6.7% from ~10.6% and EBIT margin declined to ~15.1% from ~19.5%. Gross margin remained very strong (~75.6%), indicating healthy product economics, yet the step-down in operating and net profitability suggests higher costs, mix/one-offs, or operating leverage pressure despite top-line growth.64
Positive
Balance Sheet
Leverage increased meaningfully in 2025, with debt-to-equity rising to ~2.13 from ~1.64 in 2024, reflecting a more debt-heavy capital structure. While return on equity remains solid (~15.7%), it is down sharply versus 2024 (~25.0%), and the higher leverage raises financial flexibility and refinancing risk if earnings remain under pressure.45
Neutral
Cash Flow
Cash generation is generally supportive, with free cash flow running at ~84% of net income in 2025 (healthy conversion). However, free cash flow declined in 2025 (-11.5% growth) and operating cash flow covered only ~51% of total debt (down from ~67% in 2024), which is less comfortable alongside the higher leverage.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.97B | 22.42B | 22.44B | 19.70B | 17.91B |
| Gross Profit | 17.37B | 17.09B | 16.54B | 14.67B | 13.46B |
| EBITDA | 5.37B | 5.80B | 5.05B | 4.29B | 4.43B |
| Net Income | 1.54B | 2.39B | 1.79B | 2.08B | 2.51B |
Balance Sheet | |||||
| Total Assets | 39.07B | 32.45B | 30.55B | 29.86B | 24.86B |
| Cash, Cash Equivalents and Short-Term Investments | 1.33B | 1.11B | 1.14B | 1.13B | 1.17B |
| Total Debt | 20.99B | 15.68B | 14.45B | 15.08B | 11.34B |
| Total Liabilities | 29.16B | 22.81B | 21.21B | 21.30B | 16.88B |
| Stockholders Equity | 9.84B | 9.56B | 9.26B | 8.56B | 7.98B |
Cash Flow | |||||
| Free Cash Flow | 3.18B | 3.30B | 3.58B | 1.70B | 2.55B |
| Operating Cash Flow | 3.80B | 4.08B | 4.23B | 2.62B | 3.27B |
| Investing Cash Flow | -6.79B | -1.83B | -1.77B | -3.33B | -1.30B |
| Financing Cash Flow | 3.23B | -2.24B | -2.41B | 934.00M | -1.78B |
Demant Technical Analysis
Negative
17.22
Price Trends
16.08
Negative
16.59
Negative
18.17
Negative
Market Momentum
-0.33
Negative
43.28
Neutral
19.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WILYY, the sentiment is Negative. The current price of 17.22 is above the 20-day moving average (MA) of 14.67, above the 50-day MA of 16.08, and below the 200-day MA of 18.17, indicating a bearish trend. The MACD of -0.33 indicates Negative momentum. The RSI at 43.28 is Neutral, neither overbought nor oversold. The STOCH value of 19.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WILYY.
Demant Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $14.07B | 22.70 | 9.20% | 2.28% | 5.78% | 61.52% | |
69 Neutral | $20.83B | 32.31 | 10.21% | 0.94% | 5.15% | 60.30% | |
68 Neutral | $16.62B | 80.92 | 17.36% | ― | 27.12% | -41.72% | |
65 Neutral | $18.12B | 31.78 | 5.60% | 1.05% | 5.47% | -23.03% | |
64 Neutral | $26.95B | 24.78 | 8.21% | 3.30% | -0.76% | -55.03% | |
53 Neutral | $6.03B | 28.51 | 27.42% | ― | 1.28% | -1.99% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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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.