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Smith & Nephew Snats (SNN)
NYSE:SNN
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Smith & Nephew Snats
(NYSE:SNN)
78Outperform
Positive Factors
Financial Performance
SNN posted an encouraging Q4 with top line beating expectations as US Recon performance trended in the right direction and SNN saw +23.9% growth in Other Recon with a record quarter of CORI placements.
New Product Launches
SNN's new launches are leveraging higher-growth end markets, including 510(K) clearance for its shorter hip stem CATALYSTEM and its TOTAL ANKLE Patient-Matched Guides.
Negative Factors
China Market Challenges
Lingering China Recon distributor inventory impacts are expected to affect performance.
Earnings Guidance
SNN posted a challenged Q as it missed revenue expectations, lowered its 2024 top line and margin guidance, and also lowered its 2025 margin guidance.
Smith & Nephew Snats (SNN) vs. S&P 500 (SPY)
Market Cap
$11.61B
Dividend Yield2.74%
Average Volume (3M)843.28K
Price to Earnings (P/E)27.9
Beta (1Y)0.71
Revenue Growth4.58%
EPS Growth55.99%
CountryUS
Employees17,349
SectorHealthcare
Sector Strength77
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.94
Shares Outstanding437,963,900
10 Day Avg. Volume969,912
30 Day Avg. Volume843,282
Financial Highlights & Ratios
PEG Ratio0.50
Price to Book (P/B)N/A
Price to Sales (P/S)2.11
Price to Cash Flow (P/CF)8.20
P/FCF Ratio10.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.47Price Target Upside8.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Smith & Nephew Snats Business Overview & Revenue Model
Company DescriptionSmith & Nephew plc is a global medical technology company operating primarily in the healthcare sector. It specializes in the design, manufacture, and marketing of advanced medical devices with a focus on orthopedics, sports medicine, and wound management. The company's innovative products are used by healthcare professionals to improve the quality of life for patients around the world.
How the Company Makes MoneySmith & Nephew generates revenue through the sale of its medical devices and related services. Its key revenue streams include the Orthopedics segment, which provides joint replacement systems and trauma devices; the Sports Medicine & ENT segment, offering products for minimally invasive surgery of the joints and ear, nose, and throat procedures; and the Advanced Wound Management segment, delivering products that promote wound healing and tissue repair. Significant partnerships with hospitals, clinics, and healthcare providers, along with investments in research and development, enhance SNN's ability to maintain and expand its market presence. The company's international reach allows it to capitalize on diverse healthcare markets, contributing to its overall earnings.
Smith & Nephew Snats Financial Statement Overview
Summary
Smith & Nephew Snats demonstrates strong financial health with impressive revenue and profit growth, solid profitability margins, and efficient cash flow management. Despite a slight increase in leverage, the company's balanced capital structure and improved returns to shareholders position it well in the Medical Equipment & Supplies industry.Income Statement
Smith & Nephew Snats has shown consistent revenue growth with a notable increase of 4.7% from 2023 to 2024. The gross profit margin stands strong at 69.6%, highlighting effective cost management. The net profit margin improved significantly from 4.7% in 2023 to 7.1% in 2024, demonstrating enhanced profitability. EBIT and EBITDA margins increased to 11.3% and 21.3% respectively, reflecting operational efficiency improvements.85
Very Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 50.8% in 2024, indicating a balanced capital structure. However, the debt-to-equity ratio increased slightly to 0.63, suggesting a cautious approach to leverage. ROE improved to 7.8%, signifying better returns to shareholders, driven by increased net income.78
Positive
Cash Flow
Smith & Nephew Snats experienced a robust free cash flow growth of 234.8%, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 2.40 reflects efficient cash management. The free cash flow to net income ratio of 1.47 further supports the company’s strong cash flow position.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.81B | 5.55B | 5.21B | 5.21B | 4.56B | Gross Profit |
| 4.05B | 3.82B | 3.67B | 3.67B | 3.16B | EBIT |
| 657.00M | 425.00M | 315.00M | 593.00M | 295.00M | EBITDA |
| 1.24B | 979.00M | 943.00M | 1.24B | 866.00M | Net Income Common Stockholders |
| 412.00M | 263.00M | 223.00M | 524.00M | 448.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 619.00M | 302.00M | 350.00M | 1.29B | 1.76B | Total Assets |
| 10.35B | 9.99B | 9.97B | 10.92B | 11.01B | Total Debt |
| 3.32B | 3.08B | 2.87B | 3.34B | 3.69B | Net Debt |
| 2.70B | 2.78B | 2.52B | 2.05B | 1.93B | Total Liabilities |
| 5.09B | 4.77B | 4.71B | 5.35B | 5.73B | Stockholders Equity |
| 5.26B | 5.22B | 5.26B | 5.57B | 5.28B |
| Cash Flow | Free Cash Flow | |||
| 606.00M | 181.00M | 110.00M | 469.00M | 492.00M | Operating Cash Flow |
| 987.00M | 608.00M | 468.00M | 877.00M | 935.00M | Investing Cash Flow |
| -569.00M | -448.00M | -472.00M | -691.00M | -606.00M | Financing Cash Flow |
| -86.00M | -200.00M | -926.00M | -645.00M | 1.16B |
Smith & Nephew Snats Technical Analysis
Negative
26.31
Price Trends
26.99
Negative
25.80
Positive
27.03
Negative
Market Momentum
0.27
Positive
55.09
Neutral
40.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNN, the sentiment is Negative. The current price of 26.31 is below the 20-day moving average (MA) of 28.10, below the 50-day MA of 26.99, and below the 200-day MA of 27.03, indicating a bearish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 55.09 is Neutral, neither overbought nor oversold. The STOCH value of 40.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNN.
Smith & Nephew Snats Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.61B | 27.87 | 7.82% | 2.74% | 4.58% | 55.99% | |
78 Outperform | $131.99B | 44.55 | 15.26% | 0.95% | 10.23% | -5.74% | |
77 Outperform | $106.30B | 25.19 | 8.42% | 3.38% | 2.72% | 4.48% | |
75 Outperform | $369.29B | 26.47 | 20.06% | 3.24% | -4.51% | 3.69% | |
73 Outperform | $21.37B | 24.22 | 7.24% | 0.89% | 3.84% | -9.29% | |
54 Neutral | $14.77B | 136.07 | -9.24% | 3.19% | -14.00% | -184.82% | |
48 Neutral | $6.36B | 1.14 | -49.01% | 2.63% | 17.12% | 1.49% |
* Healthcare Sector Average
Performance Comparison
SNN
Smith & Nephew Snats
26.31
2.56
10.78%
BAX
Baxter International
28.79
-12.36
-30.04%
JNJ
Johnson & Johnson
153.24
6.36
4.33%
MDT
Medtronic
82.88
2.68
3.34%
SYK
Stryker
345.80
-0.74
-0.21%
ZBH
Zimmer Biomet Holdings
107.34
-18.24
-14.52%
Smith & Nephew Snats Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 1.70% | Next Earnings Date: Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong growth in key areas, successful execution of strategic plans, and innovation leading to significant revenue contributions. While challenges persist in the China market and in managing R&D investments and cost pressures in Orthopedics, the overall outlook remains optimistic with anticipated improvements in 2025.Highlights
Strong Year-End Performance
Q4 2024 saw an 8.3% underlying revenue growth with particularly strong performance in the US at 11.9% growth.
Successful Execution of 12-Point Plan
The 12-Point Plan is driving operational improvements, product innovation, and financial outcomes with 60 basis points of margin expansion and 95% cash conversion in 2024.
Record Installations of CORI Robotics
CORI robotic systems exceeded 1,000 global installations by year-end, with a record number of new placements in Q4 2024.
Advanced Wound Management Growth
The Advanced Wound Management segment delivered 12.2% growth in Q4, driven by bioactives and devices.
Innovation Driving Revenue
Over 60% of revenue growth in 2024 came from products launched in the last five years.
Lowlights
China Market Challenges
China posed a headwind, costing 280 basis points of group growth in Q4, with continued headwinds expected in 2025.
Joint Repair and Sports Medicine VBP Impact
Volume-based procurement (VBP) in China impacted Joint Repair, with a more than 10 percentage point headwind, and similar effects expected for Arthroscopic Enabling Technologies (AET) in 2025.
R&D Spending Concerns
Despite plans for continued innovation, R&D spending was slightly lower than expected due to efficiency savings.
Orthopedics Margin Pressure
Orthopedics segment faced margin pressure due to input cost inflation, merit increases, and China VBP pricing.
Company Guidance
In the Q4 and full year 2024 results presentation, Smith & Nephew's CEO, Deepak Nath, and CFO, John Rogers, provided detailed guidance for 2025. They reported an 8.3% underlying growth in Q4 and a 60 basis points margin expansion for the year. The company achieved 95% cash conversion and a 1.4% increase in ROIC. For 2025, Smith & Nephew expects around 5% revenue growth and a significant trading margin expansion to between 19% and 20%. The margin growth will be driven by continued operating leverage and cost savings from optimizing the manufacturing network. The guidance also accounts for potential headwinds from China, which cost the company 280 basis points of group growth in Q4 2024. Despite these challenges, the company remains confident in its outlook, emphasizing a commitment to innovation and operational improvements under its 12-Point Plan.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.