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Henry Schein (HSIC) Stock Moves Up 20.6%: What's Driving It?
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Shares of Henry Schein, Inc. (HSIC - Free Report) have rallied 20.6% compared with the industry's rise of 3.7% since its fourth-quarter 2021 earnings release on Feb 15.
The leading distributor of health care products and services across the globe has a market capitalization of $12.61 billion. Its earnings for fourth-quarter 2021 surpassed the Zacks Consensus Estimate by 18.9%.
This Zacks Rank #2 (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 Henry Schein’s robust performances across all three operating businesses in the fourth quarter. Further, the market is upbeat about Henry Schein’s favorable dental business trend.
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 for the fourth quarter of 2021. The company saw robust performances by 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.
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%.
Image Source: Zacks Investment Research
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 dental specialty category, including implants, oral surgery, endodontics, and orthodontics, in the reported quarter. The company’s North American dental internal sales growth in local currencies was 9.3%, driven by solid growth, both in consumable merchandise as well as equipment product categories.
Bullish EPS Guidance: Henry Schein has updated its 2022 EPS financial guidance, instilling investor 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
Estimates for 2022 and 2023 have moved up nearly 4.3% and 3.4%, respectively, in the past 90 days, reflecting investor optimism.
Henry Schein 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 15.91%. The stock’s return on equity (ROE) stands at 15.84% versus the industry’s 13.64%.
Other Key Picks
A few other top-ranked stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , STERIS plc (STE - Free Report) and Abiomed, Inc. .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN Healthcare’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 37.3% against the industry’s 57.6% fall over the past year.
STERIS, carrying a Zacks Rank #2, has an estimated long-term growth rate of 11.3%. STERIS’ earnings surpassed estimates in three of the trailing four quarters, the average surprise being 6.34%.
STERIS has gained 69.2% compared with the industry’s 7.2% growth over the past year.
Abiomed surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.2%. Abiomed currently carries a Zacks Rank #2.
Abiomed’s long-term earnings growth rate is estimated at 20%. ABMD’s earnings yield of 1.5% compares favorably against the industry’s (6.4%).
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Henry Schein (HSIC) Stock Moves Up 20.6%: What's Driving It?
Shares of Henry Schein, Inc. (HSIC - Free Report) have rallied 20.6% compared with the industry's rise of 3.7% since its fourth-quarter 2021 earnings release on Feb 15.
The leading distributor of health care products and services across the globe has a market capitalization of $12.61 billion. Its earnings for fourth-quarter 2021 surpassed the Zacks Consensus Estimate by 18.9%.
This Zacks Rank #2 (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 Henry Schein’s robust performances across all three operating businesses in the fourth quarter. Further, the market is upbeat about Henry Schein’s favorable dental business trend.
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 for the fourth quarter of 2021. The company saw robust performances by 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.
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 dental specialty category, including implants, oral surgery, endodontics, and orthodontics, in the reported quarter. The company’s North American dental internal sales growth in local currencies was 9.3%, driven by solid growth, both in consumable merchandise as well as equipment product categories.
Bullish EPS Guidance: Henry Schein has updated its 2022 EPS financial guidance, instilling investor 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
Estimates for 2022 and 2023 have moved up nearly 4.3% and 3.4%, respectively, in the past 90 days, reflecting investor optimism.
Henry Schein 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 15.91%. The stock’s return on equity (ROE) stands at 15.84% versus the industry’s 13.64%.
Other Key Picks
A few other top-ranked stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , STERIS plc (STE - Free Report) and Abiomed, Inc. .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN Healthcare’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 37.3% against the industry’s 57.6% fall over the past year.
STERIS, carrying a Zacks Rank #2, has an estimated long-term growth rate of 11.3%. STERIS’ earnings surpassed estimates in three of the trailing four quarters, the average surprise being 6.34%.
STERIS has gained 69.2% compared with the industry’s 7.2% growth over the past year.
Abiomed surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.2%. Abiomed currently carries a Zacks Rank #2.
Abiomed’s long-term earnings growth rate is estimated at 20%. ABMD’s earnings yield of 1.5% compares favorably against the industry’s (6.4%).