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Here's Why You Should Retain DENTSPLY SIRONA (XRAY) Now
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DENTSPLY SIRONA Inc. (XRAY - Free Report) is well-poised for growth on a robust product portfolio and continued focus on research and development. However, forex remains a headwind.
Shares of this Zacks Rank #3 (Hold) have gained 26.2% compared with the industry’s growth of 22.3% in a year’s time. The S&P 500 Index has rallied 25.9% in the same time frame.
The company, with a market capitalization of $12.68 billion, is a global leader in the design, development, manufacture and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 22.2% over the next five years. It has beat estimates in each of the trailing four quarters, the average surprise being 53.8%.
What’s Favoring the Stock?
DENTSPLY’s introduction of PrimeScan, a digital impression scanner and Primemill, among other major products, has been boosting the company’s top line over the past couple of years. It also provided a boost to the consumable areas with Surefil one, Palodent 360 and the digital denture program. The company’s Astra EV Implant has been getting good traction as well.
The company will also introduce multiple new motor systems in early 2022. It will launch CEREC 5.2, which will be a significant upgrade in Primescan that further improves its speed and ease of use. This CEREC 5.2 upgrade supports the new dental scanning capability and differentiates Primescan in the marketplace.
Apart from these proven products, the company has an excellent new product pipeline that will positively impact 2021 and beyond.
Image Source: Zacks Investment Research
DENTSPLY’s overall growth strategy rests on product innovation. The company’s solid internal growth, despite challenging macroeconomic headwinds, is primarily driven by its innovative new products. The company pursues several research and development (R&D) initiatives to support technological development. Per the first-quarter 2021 earnings call, the company’s R&D has been increased substantially in 2021 and as per management this trend is likely to continue in the near future as it is focused on delivering innovation and excellent solutions to its customers.
In fact, in the second quarter, the company’s spending on R&D was up 12.2% to $40 million, and the trend is anticipated to continue as the year progresses. This, in turn, will enable DENTSPLY to focus on more significant and sustainable innovation. Apart from choosing a disciplined approach to ensure alignment with its strategic objectives, the company’s targeted R&D investments are on track to reach approximately $160 million in 2021.
What’s Weighing on It?
DENTSPLY has a significant international presence. Consequently, a strengthening U.S. dollar, especially against the euro, as well as emerging market currencies has the potential to negatively impact the company’s results.
Estimates Trend
The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $1.03 billion, suggesting growth of 14.9% from the year-ago reported number.
For 2021, the consensus mark for adjusted earnings per share stands at $2.88, suggesting an improvement of 60.9% from the previous year.
Image: Bigstock
Here's Why You Should Retain DENTSPLY SIRONA (XRAY) Now
DENTSPLY SIRONA Inc. (XRAY - Free Report) is well-poised for growth on a robust product portfolio and continued focus on research and development. However, forex remains a headwind.
Shares of this Zacks Rank #3 (Hold) have gained 26.2% compared with the industry’s growth of 22.3% in a year’s time. The S&P 500 Index has rallied 25.9% in the same time frame.
The company, with a market capitalization of $12.68 billion, is a global leader in the design, development, manufacture and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 22.2% over the next five years. It has beat estimates in each of the trailing four quarters, the average surprise being 53.8%.
What’s Favoring the Stock?
DENTSPLY’s introduction of PrimeScan, a digital impression scanner and Primemill, among other major products, has been boosting the company’s top line over the past couple of years. It also provided a boost to the consumable areas with Surefil one, Palodent 360 and the digital denture program. The company’s Astra EV Implant has been getting good traction as well.
The company will also introduce multiple new motor systems in early 2022. It will launch CEREC 5.2, which will be a significant upgrade in Primescan that further improves its speed and ease of use. This CEREC 5.2 upgrade supports the new dental scanning capability and differentiates Primescan in the marketplace.
Apart from these proven products, the company has an excellent new product pipeline that will positively impact 2021 and beyond.
DENTSPLY’s overall growth strategy rests on product innovation. The company’s solid internal growth, despite challenging macroeconomic headwinds, is primarily driven by its innovative new products. The company pursues several research and development (R&D) initiatives to support technological development. Per the first-quarter 2021 earnings call, the company’s R&D has been increased substantially in 2021 and as per management this trend is likely to continue in the near future as it is focused on delivering innovation and excellent solutions to its customers.
In fact, in the second quarter, the company’s spending on R&D was up 12.2% to $40 million, and the trend is anticipated to continue as the year progresses. This, in turn, will enable DENTSPLY to focus on more significant and sustainable innovation. Apart from choosing a disciplined approach to ensure alignment with its strategic objectives, the company’s targeted R&D investments are on track to reach approximately $160 million in 2021.
What’s Weighing on It?
DENTSPLY has a significant international presence. Consequently, a strengthening U.S. dollar, especially against the euro, as well as emerging market currencies has the potential to negatively impact the company’s results.
Estimates Trend
The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $1.03 billion, suggesting growth of 14.9% from the year-ago reported number.
For 2021, the consensus mark for adjusted earnings per share stands at $2.88, suggesting an improvement of 60.9% from the previous year.
Stocks to Consider
Some better-ranked stocks from the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , AmerisourceBergen Corporation and Patterson Companies, Inc. (PDCO - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical’s long-term earnings growth rate is estimated at 27.3%.
AmerisourceBergen’s long-term earnings growth rate is estimated at 11.3%.
Patterson Companies’ long-term earnings growth rate is projected at 9.6%.