Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Henry Schein (NASDAQ:HSIC) and the best and worst performers in the dental equipment & technology industry.
The dental equipment and technology industry encompasses companies that manufacture orthodontic products, dental implants, imaging systems, and digital tools for dental professionals. These companies benefit from recurring revenue streams tied to consumables, ongoing maintenance, and growing demand for aesthetic and restorative dentistry. However, high R&D costs, significant capital investment requirements, and reliance on discretionary spending make them vulnerable to economic cycles. Over the next few years, tailwinds for the sector include innovation in digital workflows, such as 3D printing and AI-driven diagnostics, which enhance the efficiency and precision of dental care. However, headwinds include economic uncertainty, which could reduce patient spending on elective procedures, regulatory challenges, and potential pricing pressures from consolidated dental service organizations (DSOs).
The 4 dental equipment & technology stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
Luckily, dental equipment & technology stocks have performed well with share prices up 12.9% on average since the latest earnings results.
Weakest Q1: Henry Schein (NASDAQ:HSIC)
With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ:HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.
Henry Schein reported revenues of $3.17 billion, flat year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue estimates.
“We are pleased with our first quarter financial results as well as the momentum we are seeing heading into the second quarter and remain confident in the fundamentals of our business,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein.
Henry Schein achieved the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. The stock is up 8.9% since reporting and currently trades at $71.14.
Read our full report on Henry Schein here, it’s free.
Best Q1: Dentsply Sirona (NASDAQ:XRAY)
With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ:XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.
Dentsply Sirona reported revenues of $879 million, down 7.8% year on year, outperforming analysts’ expectations by 3.2%. The business had a stunning quarter with an impressive beat of analysts’ constant currency revenue and EPS estimates.
Dentsply Sirona achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 18% since reporting. It currently trades at $16.16.
Is now the time to buy Dentsply Sirona? Access our full analysis of the earnings results here, it’s free.
Align Technology (NASDAQ:ALGN)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ:ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Align Technology reported revenues of $979.3 million, down 1.8% year on year, in line with analysts’ expectations. Still, its results were good as it locked in a solid beat of analysts’ sales volume estimates and a decent beat of analysts’ EPS estimates.
Interestingly, the stock is up 7% since the results and currently trades at $185.24.
Read our full analysis of Align Technology’s results here.
Envista (NYSE:NVST)
Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE:NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals.
Envista reported revenues of $616.9 million, down 1.1% year on year. This result topped analysts’ expectations by 1.4%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
The stock is up 17.8% since reporting and currently trades at $19.23.
Read our full, actionable report on Envista here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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