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Henry Schein (HSIC) Up 10.1% Since Posting Q4 Earnings Beat
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Shares of Henry Schein, Inc. (HSIC - Free Report) have rallied 10.1% against the industry's decline of 0.6% since its fourth-quarter 2021 earnings release on Feb 15.
The leading distributor of healthcare products and services across the globe has a market capitalization of $11.45 billion. Its earnings for fourth-quarter 2021 surpassed the Zacks Consensus Estimate by 18.9%.
This Zacks Rank #1 (Strong Buy) stock has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
The rally was largely driven by the Henry Schein’s robust performances across all three operating businesses in the fourth quarter. Further, the market is also upbeat about Henry Schein’s bullish adjusted earnings per share guidance for 2022.
Let’s take a quick look at the important catalysts to understand this positive trend.
Key Growth Catalysts
Impressive Q4 Performance: The market is upbeat about Henry Schein’s better-than-expected results fourth quarter of 2021 results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. In the International Dental business, the company registered strong sales growth in the U.K., driven by continued recovery. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well.
Recent Acquisitions and Partnerships Look Promising: Henry Schein’s revenue growth has been consistently supported by niche acquisitions and partnerships. Its robust acquisition strategy helps it pursue targets that provide access to additional product lines.
In December 2021, Henry Schein signed a cooperative contract with OMNIA Partners — one of the United States’ largest purchasing organizations for public and private sector procurement, which will expand its access to point-of-care diagnostic testing, personal protective equipment or PPE, and medical products and supplies in academic and public health settings. Other recent acquisitions include the purchase of eAssist Dental Solutions (in June 2021), a developer of key leading virtual dental billing outsourced services and the acquisition of majority ownership in Jarvis Analytics, which develops comprehensive business analytic tools to help dental practices leverage data to diagnose problems, strengthen decision-making and improve business performance.
Image Source: Zacks Investment Research
Bullish EPS Guidance: Henry Schein has updated its 2022 EPS financial guidance, which instills investors’ confidence in the stock.
For 2022, Henry Schein expects adjusted earnings per share from continuing operations in the range of $4.75 to $4.91, suggesting 7-10% growth compared with 2020. The Zacks Consensus Estimate for the same is currently pegged at $4.66.
Favorable Parameters
Share price estimates for 2022 and 2023 have moved up nearly 4.3% and 3.4%, respectively, in the past 30 days, reflecting investors’ optimism.
Henry Schein's earnings surpassed estimates in all of the trailing four quarters, the average surprise being 25.54%. For 2022, Henry Schein has an expected earnings growth rate of 7.52%, while revenues are expected to grow 6.43% on a year-over-year basis.
Henry Schein has a current cash flow growth rate of 39.17% compared with the industry’s (0.42%). The stock’s return on equity stands at 15.8% versus the industry’s 14.44%.
Envista reported second-quarter 2021 adjusted EPS of 46 cents, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $651.8 million outpaced the consensus mark by 2.9%.
Envista has a long-term earnings growth rate of 13.5%. NVST has gained 25.1% against the industry’s 18.6% drop over the past year.
McKesson reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 53.5% compared with the industry’s 7.1% growth in the past year.
Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, beating the Zacks Consensus Estimate of $2.82. Total revenues of $7,409 million beat the consensus mark of $7,126 million.
Molina Healthcare has a long-term earnings growth rate of 18.8%. MOH has gained 40.3% compared with the industry’s 40.9% increase over the past year.
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Henry Schein (HSIC) Up 10.1% Since Posting Q4 Earnings Beat
Shares of Henry Schein, Inc. (HSIC - Free Report) have rallied 10.1% against the industry's decline of 0.6% since its fourth-quarter 2021 earnings release on Feb 15.
The leading distributor of healthcare products and services across the globe has a market capitalization of $11.45 billion. Its earnings for fourth-quarter 2021 surpassed the Zacks Consensus Estimate by 18.9%.
This Zacks Rank #1 (Strong Buy) stock has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
The rally was largely driven by the Henry Schein’s robust performances across all three operating businesses in the fourth quarter. Further, the market is also upbeat about Henry Schein’s bullish adjusted earnings per share guidance for 2022.
Let’s take a quick look at the important catalysts to understand this positive trend.
Key Growth Catalysts
Impressive Q4 Performance: The market is upbeat about Henry Schein’s better-than-expected results fourth quarter of 2021 results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. In the International Dental business, the company registered strong sales growth in the U.K., driven by continued recovery. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well.
Recent Acquisitions and Partnerships Look Promising: Henry Schein’s revenue growth has been consistently supported by niche acquisitions and partnerships. Its robust acquisition strategy helps it pursue targets that provide access to additional product lines.
In December 2021, Henry Schein signed a cooperative contract with OMNIA Partners — one of the United States’ largest purchasing organizations for public and private sector procurement, which will expand its access to point-of-care diagnostic testing, personal protective equipment or PPE, and medical products and supplies in academic and public health settings. Other recent acquisitions include the purchase of eAssist Dental Solutions (in June 2021), a developer of key leading virtual dental billing outsourced services and the acquisition of majority ownership in Jarvis Analytics, which develops comprehensive business analytic tools to help dental practices leverage data to diagnose problems, strengthen decision-making and improve business performance.
Bullish EPS Guidance: Henry Schein has updated its 2022 EPS financial guidance, which instills investors’ confidence in the stock.
For 2022, Henry Schein expects adjusted earnings per share from continuing operations in the range of $4.75 to $4.91, suggesting 7-10% growth compared with 2020. The Zacks Consensus Estimate for the same is currently pegged at $4.66.
Favorable Parameters
Share price estimates for 2022 and 2023 have moved up nearly 4.3% and 3.4%, respectively, in the past 30 days, reflecting investors’ optimism.
Henry Schein's earnings surpassed estimates in all of the trailing four quarters, the average surprise being 25.54%. For 2022, Henry Schein has an expected earnings growth rate of 7.52%, while revenues are expected to grow 6.43% on a year-over-year basis.
Henry Schein has a current cash flow growth rate of 39.17% compared with the industry’s (0.42%). The stock’s return on equity stands at 15.8% versus the industry’s 14.44%.
Other Key Picks
A few other stocks in the broader medical space that investors can consider are Envista Holdings Corporation (NVST - Free Report) , McKesson Corporation (MCK - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Envista reported second-quarter 2021 adjusted EPS of 46 cents, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $651.8 million outpaced the consensus mark by 2.9%.
Envista has a long-term earnings growth rate of 13.5%. NVST has gained 25.1% against the industry’s 18.6% drop over the past year.
McKesson reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 53.5% compared with the industry’s 7.1% growth in the past year.
Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, beating the Zacks Consensus Estimate of $2.82. Total revenues of $7,409 million beat the consensus mark of $7,126 million.
Molina Healthcare has a long-term earnings growth rate of 18.8%. MOH has gained 40.3% compared with the industry’s 40.9% increase over the past year.