Mizuho has revised its outlook on Envista Holdings (NVST, Financial), reducing the price target for the company's shares from $18 to $15, while maintaining an Underperform rating. The decision reflects concerns over the potential for subdued growth within the dental industry in the upcoming first quarter.
The adjustment follows insights from the latest survey by the American Dental Association, which suggested a less optimistic environment for dental manufacturers. This cautious sentiment contributed to Mizuho's decision to lower its first-quarter performance estimates for companies across the dental sector.
Envista, a key player in dental supplies and technology, now faces heightened scrutiny as analysts anticipate that overall industry growth may not meet previous expectations. Investors should be aware of these evolving dynamics as they consider their positions in NVST moving forward.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Envista Holdings Corp (NVST, Financial) is $20.36 with a high estimate of $25.00 and a low estimate of $15.00. The average target implies an upside of 29.54% from the current price of $15.72. More detailed estimate data can be found on the Envista Holdings Corp (NVST) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Envista Holdings Corp's (NVST, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Envista Holdings Corp (NVST, Financial) in one year is $32.70, suggesting a upside of 108.02% from the current price of $15.72. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Envista Holdings Corp (NVST) Summary page.
NVST Key Business Developments
Release Date: February 05, 2025
- Q4 Revenue: $653 million, with a 2% increase in core sales adjusted for currency impact.
- Adjusted EBITDA Margin: 13.9%, 170 basis points lower than the prior year.
- Adjusted Gross Margin: 57.2%, an increase of nearly 500 basis points year-over-year.
- Adjusted EPS: $0.24, down $0.05 compared to the same quarter last year.
- Free Cash Flow: $124 million in Q4; $303 million for the full year, up 35% versus 2023.
- Core Growth for 2024: Negative 1.5%.
- Full Year Adjusted EBITDA Margin for 2024: 11.8%.
- 2025 Guidance: Core growth of 1% to 3% and adjusted EBITDA margin of approximately 14%.
- EPS Guidance for 2025: $0.95 to $1.05 per share.
- Share Repurchase Authorization: Up to $250 million over the next two years.
- Restructuring Savings: Expected to generate roughly $20 million of gross annualized savings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Envista Holdings Corp (NVST, Financial) delivered core growth of 2% in Q4 2024, with an adjusted EBITDA margin around 14%, meeting expectations.
- The company saw continued improvement in its implants business, particularly in North America, and achieved share gains and gross margin improvement in its Spark business.
- Envista Holdings Corp (NVST) generated over $300 million in free cash flow for 2024, marking a 35% increase over the prior year.
- The company announced a share repurchase program of up to $250 million over the next two years, reflecting its strong cash generation capabilities.
- Envista Holdings Corp (NVST) made significant investments in growth areas, including a $25 million investment to accelerate growth in high-margin businesses like Nobel Biocare, which returned to growth in Q4 2024.
Negative Points
- The global dental market remained soft but stable, with specific geographic markets facing headwinds and high macroeconomic volatility.
- Envista Holdings Corp (NVST) reported a decline in its diagnostics business, with negative imaging growth in key markets like China.
- The orthodontics market growth was impacted by a sharp slowdown in China due to inventory drawdowns in preparation for VBP implementation.
- The company's adjusted EBITDA margin for Q4 2024 was 13.9%, which was 170 basis points lower than the prior year.
- Envista Holdings Corp (NVST) faced a significant slowdown in China, affecting both its diagnostics and orthodontics businesses.
