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 Envista (NYSE:NVST) 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 softer Q4. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 25.1% since the latest earnings results.
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 $652.9 million, up 1.1% year on year. This print exceeded analysts’ expectations by 0.8%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates.
"In Q4 2024, Envista delivered results that were in line with expectations, indicating that our focus on growth, operations, and people is having a positive impact," said Paul Keel, Envista's CEO.
Envista Total Revenue
Envista pulled off the biggest analyst estimates beat of the whole group. Still, the market seems discontent with the results. The stock is down 24.4% since reporting and currently trades at $15.14.
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 $995.2 million, up 4% year on year, in line with analysts’ expectations. It was a decent quarter with EPS in line with analysts’ estimates.
Align Technology Total Revenue
The stock is down 24.4% since reporting. It currently trades at $163.63.
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 $905 million, down 10.6% year on year, falling short of analysts’ expectations by 1.6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Dentsply Sirona delivered the slowest revenue growth in the group. As expected, the stock is down 33.4% since the results and currently trades at $12.55.
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 $3.19 billion, up 5.8% year on year. This number came in 2.3% below analysts' expectations. Overall, it was a softer quarter as it also produced a miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ organic revenue estimates.
Henry Schein delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 16.2% since reporting and currently trades at $65.03.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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