Reasons to Retain DENTSPLY SIRONA (XRAY) in Your Portfolio Now
DENTSPLY SIRONA XRAY is well poised for growth on a robust product portfolio and continued focus on research and development. However, forex remains a concern.
Shares of this Zacks Rank #3 (Hold) company have lost 9.4% year to date against the industry's 6.2% growth. The S&P 500 Index has gained 9.9% in the same time frame.
XRAY, with a market capitalization of $6.88 billion, is a global leader in the design, development, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 8.9% over the next five years.
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What's Favoring the Stock?
Continued demand for Byte and SureSmile remains a key driver for DENTSPLY SIRONA's Orthodontic and Implant Solutions sales. Moreover, growth in all regions and product categories on the back of stable patient traffic and price increases has been driving sales at the company’s Essential Dental Solutions segment. Wellspect Healthcare’s products bring additional sales. Strong growth in aligners and CAD/CAM equipment supported Connected Technology Solutions’ fourth-quarter sales.
Apart from encouraging demand for its products, XRAY is also benefiting from its transformational activities initiated in early 2023. These activities include workforce reduction, simplified management structure, centralized functions and infrastructure optimization. These initiatives have generated significant cost savings for the company, thereby boosting prospects for double-digit earnings growth in 2024.
Meanwhile, the company continues to add new products to its portfolio, thereby improving growth prospects. Earlier this year, XRAY launched Lucitone for Primeprint, which will likely help it accelerate the adoption of 3D printing in dental practices. The company, recently, expanded its collaboration with private dental office furniture and equipment manufacturer, A-dec, to introduce a new integrated product offering that will bring together Primescan Connect and certain A-dec delivery systems.
What's Weighing on the Stock?
DENTSPLY SIRONA is facing macroeconomic headwinds in many regions, especially in ex-U.S. markets. Sales at Connected Technology Solutions were hurt during the fourth quarter due to softness in imaging, a trend that is likely to plague the segment this year as well. Although there is an improved business sentiment in the United States, the same remains gloomy in German and Australian markets. Patient demand continued to remain low in China during the fourth quarter.
Sales of equipment, instruments and implants declined during the last-reported quarter, thereby raising concerns.
Estimate Trend
The Zacks Consensus Estimate for 2024 revenues is pegged at $3.99 billion, indicating a 0.7% increase from the 2023 level.
The consensus mark for adjusted earnings per share is pinned at $2.06 for 2024, indicating a 12.5% year-over-year improvement.
DENTSPLY SIRONA Inc. Price
DENTSPLY SIRONA Inc. price | DENTSPLY SIRONA Inc. Quote
Stocks to Consider
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Cardinal Health, Inc. CAH and Cencora, Inc. COR.
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 31.6% so far this year compared with the industry’s 9.6% growth.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 14.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
Cardinal Health’s shares have risen 11.2% so far this year compared with the industry’s 6.2% growth.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.
Cencora’s shares have risen 18.3% so far this year compared with the industry’s 6.9% growth.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
Cencora, Inc. (COR) : Free Stock Analysis Report
