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Here's Why You Should Invest In Henry Schein (HSIC) Now
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Henry Schein, Inc. (HSIC - Free Report) has been gaining from a favorable international Dental business, driven by continued market recovery. Further, growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic at dental offices. Yet, rising operating expenses and stiff competition raise apprehension.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 30.3% compared with 11.1% growth of the industry and 10.2% rise of the S&P 500 composite.
The renowned global distributor of health care products and services has a market capitalization of $12.28 billion. Its fourth-quarter 2021 earnings surpassed the Zacks Consensus Estimate by 18.9%.
Let’s delve deeper.
Key Growth Drivers
Dental Business Trends Favorable for the Long Term: Henry Schein’s strategy to expand digital dentistry globally is encouraging. Per a report by MarketWatch, the global dental services market size was valued at $418.3 million in 2020 and is projected to reach $728.6 million by 2027, at a CAGR of 7.8%.
During the fourth quarter, Henry Schein’s global dental sales increased 9.4% compared with the same period last year. Henry Schein noted that growth was strong in each of the dental specialty categories, including implants, oral surgery, endodontics, and orthodontics, in the reported quarter.
Henry Schein One Holds Potential: Henry Schein seems to be upbeat about its dental technology joint venture (JV), Henry Schein One. Henry Schein One dental software business has been progressing well despite a challenging business environment.
Image Source: Zacks Investment Research
Internationally, technology and value-added services internal sales increased 17.8% in local currencies compared with the prior year, driven primarily by Henry Schein One with particular strength in software excellence business on the reopening in the U.K. Growth within Henry Schein One continues to be driven mainly by a recovery in in-patient traffic at dental offices.
Expansion Via Acquisitions & Partnerships: Henry Schein’s revenue growth has been consistently supported by niche acquisitions and partnerships.
In December 2021, Henry Schein signed a cooperative contract with OMNIA Partners -- one of the nation’s largest purchasing organizations for public and private sector procurement that will expand access to point-of-care diagnostic testing, personal protective equipment (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) and the acquisition of majority ownership in Jarvis Analytics which develops comprehensive business analytic tools.
Downsides
Tough Competition: The U.S. healthcare products and service distribution industry is highly competitive and consists of national, regional and local distributors. In the North American dental products market, the company faces stiff competition from the Patterson Dental business of Patterson Companies Inc. and Benco Dental Supply.
Contagion of Economic Problems: The current macroeconomic environment across the globe has affected Henry Schein’s financial operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare. This might put pressure on players in the healthcare industry, with Henry Schein being no exception.
Estimate Trend
Henry Schein has been witnessing a positive estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its 2021 earnings has moved 4.3% north to $4.86.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $13.20 billion, suggesting a 6.4% rise year over year.
Other Key Picks
A few other top-ranked stocks in the broader medical space are McKesson Corporation (MCK - Free Report) , AMN Healthcare Services, Inc. (AMN - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 49.7% compared with the industry’s 4.7% growth in the past year.
AMN Healthcare, flaunting a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry in the past year. AMN has gained 23.8% versus the 62% industry decline.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3% versus the industry’s negative yield. BIO surpassed earnings estimates in the trailing four quarters, the average surprise being 66.9%.
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Here's Why You Should Invest In Henry Schein (HSIC) Now
Henry Schein, Inc. (HSIC - Free Report) has been gaining from a favorable international Dental business, driven by continued market recovery. Further, growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic at dental offices. Yet, rising operating expenses and stiff competition raise apprehension.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 30.3% compared with 11.1% growth of the industry and 10.2% rise of the S&P 500 composite.
The renowned global distributor of health care products and services has a market capitalization of $12.28 billion. Its fourth-quarter 2021 earnings surpassed the Zacks Consensus Estimate by 18.9%.
Let’s delve deeper.
Key Growth Drivers
Dental Business Trends Favorable for the Long Term: Henry Schein’s strategy to expand digital dentistry globally is encouraging. Per a report by MarketWatch, the global dental services market size was valued at $418.3 million in 2020 and is projected to reach $728.6 million by 2027, at a CAGR of 7.8%.
During the fourth quarter, Henry Schein’s global dental sales increased 9.4% compared with the same period last year. Henry Schein noted that growth was strong in each of the dental specialty categories, including implants, oral surgery, endodontics, and orthodontics, in the reported quarter.
Henry Schein One Holds Potential: Henry Schein seems to be upbeat about its dental technology joint venture (JV), Henry Schein One. Henry Schein One dental software business has been progressing well despite a challenging business environment.
Internationally, technology and value-added services internal sales increased 17.8% in local currencies compared with the prior year, driven primarily by Henry Schein One with particular strength in software excellence business on the reopening in the U.K. Growth within Henry Schein One continues to be driven mainly by a recovery in in-patient traffic at dental offices.
Expansion Via Acquisitions & Partnerships: Henry Schein’s revenue growth has been consistently supported by niche acquisitions and partnerships.
In December 2021, Henry Schein signed a cooperative contract with OMNIA Partners -- one of the nation’s largest purchasing organizations for public and private sector procurement that will expand access to point-of-care diagnostic testing, personal protective equipment (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) and the acquisition of majority ownership in Jarvis Analytics which develops comprehensive business analytic tools.
Downsides
Tough Competition: The U.S. healthcare products and service distribution industry is highly competitive and consists of national, regional and local distributors. In the North American dental products market, the company faces stiff competition from the Patterson Dental business of Patterson Companies Inc. and Benco Dental Supply.
Contagion of Economic Problems: The current macroeconomic environment across the globe has affected Henry Schein’s financial operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare. This might put pressure on players in the healthcare industry, with Henry Schein being no exception.
Estimate Trend
Henry Schein has been witnessing a positive estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its 2021 earnings has moved 4.3% north to $4.86.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $13.20 billion, suggesting a 6.4% rise year over year.
Other Key Picks
A few other top-ranked stocks in the broader medical space are McKesson Corporation (MCK - Free Report) , AMN Healthcare Services, Inc. (AMN - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson, carrying a Zacks Rank #2, reported third-quarter fiscal 2022 adjusted earnings per share (EPS) of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 49.7% compared with the industry’s 4.7% growth in the past year.
AMN Healthcare, flaunting a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry in the past year. AMN has gained 23.8% versus the 62% industry decline.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3% versus the industry’s negative yield. BIO surpassed earnings estimates in the trailing four quarters, the average surprise being 66.9%.