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Henry Schein (HSIC)
NASDAQ:HSIC
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Henry Schein
(NASDAQ:HSIC)66Neutral
Positive Factors
Investment and Leadership
KKR's 12% investment in shares of HSIC is seen as positive for the company, as it shows confidence in the long-term outlook for HSIC beyond 2025.
Specialty Segment Performance
Specialty dental continues to perform well, and there is an expectation of relative strength in the category throughout FY25.
Negative Factors
Financial Performance
Total revenue of $3.19 billion (+5.8% as reported) fell significantly short of the original expectation of $3.35 billion.
Market Challenges
Henry Schein's full 4Q results and commentary still point to challenged dental and medical end markets, the major factor of the soft FY25 guidance.
Henry Schein (HSIC) vs. S&P 500 (SPY)
Market Cap
$8.73B
Dividend YieldN/A
Average Volume (3M)2.39M
Price to Earnings (P/E)23.0
Beta (1Y)0.44
Revenue Growth2.71%
EPS Growth-3.26%
CountryUS
Employees25,000
SectorHealthcare
Sector Strength74
IndustryMedical Distributors
Share Statistics
EPS (TTM)3.05
Shares Outstanding124,176,780
10 Day Avg. Volume3,641,172
30 Day Avg. Volume2,390,280
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.69
Price to Cash Flow (P/CF)10.80
P/FCF Ratio9.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$80.00Price Target Upside11.95% Upside
Rating ConsensusHold
Number of Analyst Covering12
Henry Schein Business Overview & Revenue Model
Company DescriptionHenry Schein, Inc. engages in the provision of health care products and services to medical, dental, and veterinary office-based practitioners. It operates through the Healthcare Distribution, and Technology and Value-Added Services segments. The Healthcare Distribution segment includes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. The Technology & Value-Added Services segment offers financial services on a non-recourse basis, e-services practice, technology, network and hardware services. The company was founded by Henry Schein and Esther Schein in 1932 and is headquartered in Melville, NY.
How the Company Makes MoneyHenry Schein generates revenue primarily through the sale of healthcare products and services to dental and medical practitioners. Its revenue model is diversified across various streams, including the direct sale of consumable medical and dental supplies, high-tech dental and medical equipment, and pharmaceuticals. Additionally, the company earns through its technology and value-added services segment, which provides practice management software and other digital solutions. Significant partnerships with manufacturers and healthcare providers enhance their distribution network and market reach, contributing to stable revenue growth. The company's extensive catalog and ability to supply a wide range of healthcare products and services make it a preferred distributor in the healthcare industry.
Henry Schein Financial Statement Overview
Summary
Henry Schein demonstrates solid financial performance with stable revenue growth and operational efficiency. While there are concerns about increased debt levels and slight declines in net income, the company maintains a healthy cash flow position, which provides a buffer against potential financial risks.Income Statement
Henry Schein shows a modest revenue growth with a slight increase in total revenue from $12.34B to $12.67B from 2023 to 2024. The gross profit margin remains steady, but the net income has slightly decreased, impacting the net profit margin negatively. The EBIT and EBITDA margins have shown resilience, indicating stable operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio due to increased debt levels, which could pose a risk if not managed effectively. However, the equity ratio remains healthy, suggesting that the company is maintaining a solid equity base relative to its assets. The return on equity has slightly declined due to reduced net income.70
Positive
Cash Flow
The company's cash flow statement reveals a strong operating cash flow, which has significantly improved from the previous year, leading to robust free cash flow growth. This improvement indicates effective cash management, although the free cash flow to net income ratio has been under some pressure due to lower net income.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.67B | 12.34B | 12.65B | 12.40B | 10.12B | Gross Profit |
| 4.02B | 3.86B | 3.83B | 3.67B | 2.81B | EBIT |
| 621.00M | 615.00M | 747.00M | 851.66M | 535.30M | EBITDA |
| 941.00M | 877.00M | 1.09B | 1.07B | 726.81M | Net Income Common Stockholders |
| 390.00M | 416.00M | 538.00M | 631.00M | 403.79M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 122.00M | 171.00M | 117.00M | 117.97M | 421.19M | Total Assets |
| 10.22B | 10.57B | 8.61B | 8.48B | 7.77B | Total Debt |
| 2.87B | 2.74B | 1.50B | 1.22B | 1.00B | Net Debt |
| 2.75B | 2.57B | 1.38B | 1.10B | 581.23M | Total Liabilities |
| 5.38B | 5.42B | 3.94B | 4.42B | 3.79B | Stockholders Equity |
| 3.39B | 3.65B | 3.45B | 3.43B | 3.35B |
| Cash Flow | Free Cash Flow | |||
| 661.00M | 313.00M | 506.00M | 630.57M | 550.08M | Operating Cash Flow |
| 848.00M | 500.00M | 602.00M | 709.58M | 598.91M | Investing Cash Flow |
| -430.00M | -1.14B | -276.00M | -677.22M | -115.02M | Financing Cash Flow |
| -510.00M | 701.00M | -315.00M | -332.96M | -187.19M |
Henry Schein Technical Analysis
Negative
71.46
Price Trends
74.22
Negative
73.24
Negative
71.27
Negative
Market Momentum
-1.13
Positive
30.48
Neutral
5.34
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSIC, the sentiment is Negative. The current price of 71.46 is below the 20-day moving average (MA) of 76.53, below the 50-day MA of 74.22, and above the 200-day MA of 71.27, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 30.48 is Neutral, neither overbought nor oversold. The STOCH value of 5.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HSIC.
Henry Schein Risk Analysis
Henry Schein disclosed 47 risk factors in its most recent earnings report. Henry Schein 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
Henry Schein Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $80.67B | 29.50 | 51.23% | 0.41% | 14.29% | -1.20% | |
76 Outperform | $10.54B | 24.88 | 8.96% | 7.12% | 9.90% | 56.41% | |
70 Outperform | $2.75B | 20.08 | 14.02% | 3.34% | -0.85% | -23.40% | |
66 Neutral | $8.73B | 23.03 | 11.49% | ― | 2.71% | -3.26% | |
60 Neutral | $30.51B | 23.58 | -43.80% | 1.60% | 2.85% | 110.82% | |
54 Neutral | $17.80B | 136.07 | -4.48% | 2.64% | -14.00% | -184.82% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
HSIC
Henry Schein
71.46
-3.87
-5.14%
BAX
Baxter International
35.16
-6.71
-16.03%
CAH
Cardinal Health
127.42
18.83
17.34%
MCK
McKesson
639.62
116.98
22.38%
OHI
Omega Healthcare
37.55
8.82
30.70%
PDCO
Patterson Companies
31.14
5.15
19.82%
Henry Schein Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -7.96% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong achievements in strategic goals and specialty product growth. However, challenges in the orthodontic segment, medical sales, and flat patient traffic tempered the positive outlook. The sentiment remains balanced with noteworthy strategic successes and operational hurdles.Highlights
BOLD+1 Strategic Plan Success
Henry Schein exceeded their key goal of generating 40% of worldwide operating income from high-growth, high-margin businesses by 2024.
Strong Performance in Global Specialty Products
The Global Specialty Products Group demonstrated solid growth in dental implants, biomaterials, and endodontics.
U.S. Dental Equipment Sales Surge
U.S. dental equipment sales increased double digits, driven by both traditional and digital equipment.
Home Solutions Business Growth
The Home Solutions business performed well, growing 8% year-over-year, and increased its annual run rate to approximately $400 million.
Successful Cost Management
The company achieved a 260 basis point improvement in non-GAAP operating margin year-over-year, benefiting from restructuring initiatives.
Cash Flow Improvement
Operating cash flow for the full year in 2024 was $848 million, a $348 million increase from 2023.
Lowlights
Challenges in Orthodontic Segment
The orthodontic business faced challenges due to a key product going off patent, resulting in decreased sales.
Medical Segment Struggles
Results in the U.S. medical business were impacted by a late start to the flu season and lower sales of vaccines and PPE.
Flat Patient Traffic
The fourth quarter saw relatively flat patient traffic, impacting sales performance.
Lower-than-Expected Revenue Growth
Total sales growth was 5.8% for Q4, which was below the previously provided guidance, partly due to slow end-of-quarter sales.
Company Guidance
During Henry Schein's Fourth Quarter 2024 Earnings Call, the company provided comprehensive guidance for 2025, projecting total sales growth of 2% to 4% over 2024. The anticipated non-GAAP diluted EPS for 2025 is forecasted to be between $4.80 and $4.94, reflecting a 1% to 4% increase over the previous year. Despite a challenging market, the company expects non-GAAP adjusted EBITDA to grow in the mid-single digits from the $1.1 billion adjusted EBITDA reported in 2024. Henry Schein aims to leverage $75 million to $100 million in cost savings from restructuring initiatives, although these savings are partly offset by investments in technology and normalized incentive compensation. The company highlighted the stabilization of dental and medical end markets, with expectations of modest market growth, and emphasized its strategic focus on high-growth, high-margin businesses, particularly within its Global Specialty Products and Technology Groups.Henry Schein Corporate Events
Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Henry Schein Partners with KKR for Strategic Growth
Positive
Jan 29, 2025
On January 29, 2025, Henry Schein, Inc. announced a strategic partnership with KKR, resulting in a $250 million investment in Henry Schein’s common stock, making KKR a 12% shareholder. This collaboration aims to enhance shareholder value through strategic growth and operational excellence. Additionally, the agreement includes board appointments of KKR representatives, Max Lin and William Daniel, and separate board additions, all expected to reinforce Henry Schein’s strategic and financial expertise. The company also shared preliminary financial results for 2024, highlighting a revenue of $12.7 billion and the introduction of financial guidance for 2025, predicting modest growth.
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.