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Here's Why You Should Hold on to Henry Schein (HSIC) Now
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Henry Schein, Inc. (HSIC - Free Report) has been gaining from the robust first-quarter performance by all three operating businesses. 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 #3 (Hold) stock has gained 5.2% against 5.4% fall of the industry and 4.2% decline of the S&P 500 composite.
The renowned global distributor of health care products and services has a market capitalization of $11.67 billion. Its first-quarter 2022 earnings surpassed the Zacks Consensus Estimate by 7.4%.
Let’s delve deeper.
Key Growth Drivers
Impressive Q1 Results: Henry Schein exited the first quarter of 2022 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. First-quarter growth in the dental business was driven by strong global equipment sales as dentists continued to invest in their practices and consumable merchandise sales. 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. Widespread network and channel mix along with favorable long-term trends in the dental business look encouraging. A strong solvency position is a plus.
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.
During the first quarter, internationally, technology and value-added services’ internal sales increased 23.4% in local currencies compared with the prior year, driven primarily by Henry Schein One with particular strength in practice management business. Growth within Henry Schein One continues to be driven by a recovery in in-patient traffic to dental offices. The company saw solid growth in Dentrix and Ascend.
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Bullish Guidance: Henry Schein affirmed its earnings per share (EPS) guidance for 2022. For the year, the company expects GAAP earnings per share in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP earnings per share and growth of 5% to 9% compared with 2021 non-GAAP diluted earnings per share. The Zacks Consensus Estimate for the metric is currently pegged at $4.66.
For 2022, Henry Schein expects sales growth of nearly 5% to 8% over 2021. The Zacks Consensus Estimate for revenues is currently pegged at $13.14 billion.
Downsides
Mounting Expenses: During the first quarter, selling, general and administrative expenses rose 11.1%. Adjusted operating margin contracted 32 basis points year over year to 9.2%. The escalating costs are building pressure on the bottom line.
Tough Competition: The U.S. healthcare products and service distribution industry are highly competitive and consist principally of national, regional and local distributors. In the North American dental products market, the company faces stiff competition from Patterson Dental business of Patterson Companies Inc. and Benco Dental Supply.
Estimate Trends
Henry Schein is witnessing a positive estimate revision trend for the current year. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.3% north to $4.86.
The Zacks Consensus Estimate for 2022 revenues is pegged at $13.09 billion, suggesting a 5.6% rise from the year-ago number.
Other Key Picks
A few better-ranked stocks in the broader medical space that have announced quarterly results are UnitedHealth Group Incorporated (UNH - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Alkermes plc (ALKS - Free Report) .
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 14.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.
Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.
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Here's Why You Should Hold on to Henry Schein (HSIC) Now
Henry Schein, Inc. (HSIC - Free Report) has been gaining from the robust first-quarter performance by all three operating businesses. 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 #3 (Hold) stock has gained 5.2% against 5.4% fall of the industry and 4.2% decline of the S&P 500 composite.
The renowned global distributor of health care products and services has a market capitalization of $11.67 billion. Its first-quarter 2022 earnings surpassed the Zacks Consensus Estimate by 7.4%.
Let’s delve deeper.
Key Growth Drivers
Impressive Q1 Results: Henry Schein exited the first quarter of 2022 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. First-quarter growth in the dental business was driven by strong global equipment sales as dentists continued to invest in their practices and consumable merchandise sales. 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. Widespread network and channel mix along with favorable long-term trends in the dental business look encouraging. A strong solvency position is a plus.
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.
During the first quarter, internationally, technology and value-added services’ internal sales increased 23.4% in local currencies compared with the prior year, driven primarily by Henry Schein One with particular strength in practice management business. Growth within Henry Schein One continues to be driven by a recovery in in-patient traffic to dental offices. The company saw solid growth in Dentrix and Ascend.
Bullish Guidance: Henry Schein affirmed its earnings per share (EPS) guidance for 2022. For the year, the company expects GAAP earnings per share in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP earnings per share and growth of 5% to 9% compared with 2021 non-GAAP diluted earnings per share. The Zacks Consensus Estimate for the metric is currently pegged at $4.66.
For 2022, Henry Schein expects sales growth of nearly 5% to 8% over 2021. The Zacks Consensus Estimate for revenues is currently pegged at $13.14 billion.
Downsides
Mounting Expenses: During the first quarter, selling, general and administrative expenses rose 11.1%. Adjusted operating margin contracted 32 basis points year over year to 9.2%. The escalating costs are building pressure on the bottom line.
Tough Competition: The U.S. healthcare products and service distribution industry are highly competitive and consist principally of national, regional and local distributors. In the North American dental products market, the company faces stiff competition from Patterson Dental business of Patterson Companies Inc. and Benco Dental Supply.
Estimate Trends
Henry Schein is witnessing a positive estimate revision trend for the current year. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.3% north to $4.86.
The Zacks Consensus Estimate for 2022 revenues is pegged at $13.09 billion, suggesting a 5.6% rise from the year-ago number.
Other Key Picks
A few better-ranked stocks in the broader medical space that have announced quarterly results are UnitedHealth Group Incorporated (UNH - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Alkermes plc (ALKS - Free Report) .
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 14.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.
Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.