Fresenius Medical Care (FMS) AI Stock Analysis

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Fresenius Medical Care

(NYSE:FMS)

72Outperform

Fresenius Medical Care's stock is rated at 72, driven by stable financial health, effective cash flow management, and strategic progress highlighted in their earnings call. The stock's valuation is reasonable, and technical indicators suggest a slight upward momentum. However, reliance on debt and challenges in the U.S. dialysis market present risks.

Fresenius Medical Care (FMS) vs. S&P 500 (SPY)

Market Cap

$14.31B

Dividend Yield1.85%

Average Volume (3M)352.61K

Price to Earnings (P/E)24.1

Beta (1Y)0.64

Revenue Growth-0.57%

EPS Growth8.25%

CountryUS

Employees111,513

SectorHealthcare

Sector Strength77

IndustryMedical - Care Facilities

Share Statistics

EPS (TTM)0.99

Shares Outstanding586,826,900

10 Day Avg. Volume287,346

30 Day Avg. Volume352,614

Financial Highlights & Ratios

PEG Ratio2.93

Price to Book (P/B)N/A

Price to Sales (P/S)0.67

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.45

Price Target Upside14.71% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

Fresenius Medical Care Business Overview & Revenue Model

Company DescriptionFresenius Medical Care (FMS) is a leading global healthcare company specializing in providing dialysis services and products for individuals with chronic kidney failure. Operating in the healthcare sector, the company is renowned for its comprehensive network of dialysis clinics, manufacturing of dialysis machines, and production of dialyzers and related supplies. Fresenius Medical Care is dedicated to offering innovative treatment solutions to enhance the quality of life for patients with kidney-related ailments.

How the Company Makes MoneyFresenius Medical Care generates revenue primarily through two main segments: Healthcare Services and Healthcare Products. The Healthcare Services segment includes the operation of a vast network of dialysis clinics that provide treatment to patients, for which the company receives payments from health insurers, government healthcare programs, and private payers. Meanwhile, the Healthcare Products segment involves the sale of dialysis machines, dialyzers, and other related medical supplies to healthcare providers and clinics worldwide. Additionally, Fresenius Medical Care benefits from strategic partnerships and contracts with healthcare institutions and governments, further supporting its revenue streams and market presence.

Fresenius Medical Care Financial Statement Overview

Summary

Fresenius Medical Care shows stable financial health with consistent revenue and strong operating cash flow. There is a notable improvement in EBIT and return on equity, though the company is reliant on debt and net profitability is relatively low.

Income Statement

Positive

Fresenius Medical Care has demonstrated consistent revenue performance with a slight decline from $19.5B in 2023 to $19.3B in 2024. Gross profit margins have been stable around 24-25%. The company has shown resilience in EBIT and EBITDA margins, with a notable recovery in EBIT from negative in 2022 to $1.39B in 2024. However, net income growth has been moderate, and the net profit margin remains relatively low at around 2.8% in 2024.

Balance Sheet

Positive

The balance sheet shows a stable equity position with stockholders' equity increasing to $14.6B in 2024. The debt-to-equity ratio is relatively high at approximately 0.75, indicating a significant reliance on debt financing. The equity ratio is around 43.4%, which is stable but suggests moderate leverage. Return on equity improved to 3.7% in 2024, indicating better profitability on shareholder capital.

Cash Flow

Positive

Operating cash flow remains strong at $2.39B in 2024, supporting the company's liquidity. Free cash flow generation is robust, with a significant free cash flow to net income ratio of over 3x in 2024, highlighting efficient cash conversion. However, free cash flow declined from 2023 levels, posing a potential concern for future investments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
19.34B	19.45B	19.40B	17.62B	17.86B
	Gross Profit
4.76B	4.93B	5.31B	5.08B	5.54B
	EBIT
1.39B	1.37B	-258.36M	301.32M	529.00M
	EBITDA
3.21B	3.21B	1.58B	3.55B	4.13B
	Net Income Common Stockholders
537.91M	499.00M	673.40M	969.31M	1.16B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.45B	1.54B	1.44B	1.62B	1.24B
	Total Assets
33.57B	33.93B	35.75B	34.37B	31.69B
	Total Debt
10.98B	12.05B	13.21B	13.32B	12.38B
	Net Debt
9.83B	10.67B	11.94B	11.84B	11.30B
	Total Liabilities
17.80B	19.10B	20.30B	20.39B	19.36B
	Stockholders Equity
14.58B	13.62B	15.45B	13.98B	12.33B
Cash Flow		Free Cash Flow
1.69B	1.94B	756.00M	806.00M	2.15B
	Operating Cash Flow
2.39B	2.63B	2.17B	2.49B	4.23B
	Investing Cash Flow
-84.94M	-544.23M	-734.73M	-1.20B	-1.33B
	Financing Cash Flow
-2.57B	-1.86B	-1.62B	-1.02B	-2.66B

Fresenius Medical Care Technical Analysis

Technical Analysis Sentiment

Negative

Last Price23.93

Price Trends

50DMA

24.16

Negative

100DMA

23.45

Positive

200DMA

21.66

Positive

Market Momentum

MACD

0.25

Negative

RSI

56.98

Neutral

STOCH

71.48

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMS, the sentiment is Negative. The current price of 23.93 is below the 20-day moving average (MA) of 24.41, below the 50-day MA of 24.16, and above the 200-day MA of 21.66, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 56.98 is Neutral, neither overbought nor oversold. The STOCH value of 71.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FMS.

Fresenius Medical Care Risk Analysis

Fresenius Medical Care disclosed 26 risk factors in its most recent earnings report. Fresenius Medical Care reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Fresenius Medical Care Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UHS	74 Outperform	$11.38B	10.38	17.82%	0.46%	10.82%	65.64%
HCA	73 Outperform	$81.65B	15.07	-230.22%	0.81%	8.67%	15.32%
FMS	72 Outperform	$14.31B	24.14	3.87%	1.85%	-0.57%	8.25%
EHC	72 Outperform	$9.89B	21.97	24.52%	0.65%	11.91%	28.47%
THC	72 Outperform	$11.45B	3.73	110.75%	―	0.57%	440.71%
DVA	62 Neutral	$11.96B	13.91	159.08%	―	5.56%	45.02%
Sector *	48 Neutral	$6.36B	1.14	-49.00%	2.63%	17.14%	1.39%

* Healthcare Sector Average

Performance Comparison

FMS

Fresenius Medical Care

23.93

5.40

29.14%

DVA

DaVita

149.49

15.76

11.78%

HCA

HCA Healthcare

331.65

6.24

1.92%

EHC

Encompass Health

97.96

16.23

19.86%

THC

Tenet Healthcare

120.35

18.51

18.18%

UHS

Universal Health

174.53

3.59

2.10%

Fresenius Medical Care Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 2.66% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance, successful cost-saving initiatives, and positive developments in Care Enablement. However, challenges such as elevated mortality rates and lower than expected volume growth in the U.S. dialysis business were noted. The strategic initiatives and innovation efforts like the FDA approval for the 5008X machine position the company for future growth.

Highlights

Strong Financial Performance

Achieved 18% operating income growth at the upper end of earnings outlook for 2024, along with a 4% organic growth.

FME25 Transformation Program Success

Increased the total savings target from EUR650 million to EUR750 million by the end of 2025, exceeding the initial expectations.

Positive Developments in Care Enablement

Care Enablement improved its full-year margin to 6.1%, nearly tripling from the prior year, driven by volume growth and cost efficiencies.

Dividend Increase

Planning to propose a 21% increase in dividend, reflecting a strong financial policy and healthy cash flow.

FDA Approval and Innovation

Received FDA approval for the high-volume Hemodiafiltration-capable 5008X machine, with first treatments already conducted.

Lowlights

Elevated Mortality Rates

Continued to experience elevated mortality in the United States, impacting treatment volumes.

Challenges in U.S. Dialysis Business

Lower than expected volume growth in the U.S. dialysis business over the last two years.

Impact of Value-Based Care Business

The value-based care business realized a slightly negative contribution to operating income in 2024, with expectations to remain slightly negative to breakeven in 2025.

Company Guidance

During the Fresenius Medical Care's fourth quarter 2024 earnings call, CEO Helen Giza and CFO Martin Fischer highlighted the company's robust financial performance and strategic advancements. The company reported a Net Promoter Score of 72, reflecting strong patient satisfaction. Financially, Fresenius achieved 4% organic revenue growth and operating income margin improvements, with Care Delivery surpassing a 10% margin and Care Enablement reaching a 6.1% margin. The FME25 program exceeded its initial savings target, now aiming for €750 million by 2025. The value-based care business contributed €1.8 billion in revenue, with plans to reach €1.9 billion by 2025. Despite challenges like elevated mortality and lower-than-expected U.S. dialysis volume growth, the company maintained a positive outlook, projecting high teens to high 20s percent operating income growth for 2025. The strategic divestiture plan continued, with €750 million in cash proceeds realized by the end of 2024. The call also addressed the rollout of the 5008X Hemodiafiltration machine, anticipated to enhance U.S. market operations.

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.