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Envista (NVST) Down 5.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Envista (NVST - Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Envista due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Envista Q4 Earnings Miss Estimates, Margins Down
Envista reported fourth-quarter 2023 adjusted earnings per share of 29 cents, down 44.2% year over year. The bottom line missed the Zacks Consensus Estimate by 12.1%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, goodwill and intangible asset impairment, among others.
The company’s loss from continuing operations was $1.27 in the quarter compared with the year-ago quarter’s EPS of 45 cents.
For the full year, adjusted earnings were $1.53 per share, reflecting a 21.2% fall from the year-ago period. It also missed the Zacks Consensus Estimate by 3.2%.
Revenues in Detail
Revenues totaled $645.6 million in the reported quarter, down 2.3% year over year. However, the metric topped the Zacks Consensus Estimate by 2.3%.
Total revenues for 2023 were $2.57 billion, dropping 0.1% from the year-ago period’s levels. The figure beat the Zacks Consensus Estimate by 0.8%.
Segments in Detail
In the fourth quarter, Speciality Products & Technologies totaled $415.9 million, up 4.4%. Within the segment, Envista’s Orthodontic business rose nearly 15%, with Spark continuing to outperform.
Revenues in the Equipment & Consumables segment fell 12.5% year over year to $229.7 million in the quarter under review. The downside was primarily due to the timing of orders in the North American distribution channel.
Operational Update
Gross profit in the reported quarter fell 8.3% year over year to $335.9 million.
Gross margin contracted 339 basis points (bps) to 52%.
Selling, general and administrative expenses were up 2.6% year over year to $260.2 million. Research and development expenses fell 17.9% year over year to $20.2 million.
Operating profit of $55.5 million fell 36.9% year over year. The operating margin contracted 472 bps to 8.6%.
Financial Update
Envista ended 2023 with cash and cash equivalents of $940 million compared with $606.9 million at the end of 2022. Total long-term debt was $1.39 billion at the end of 2023 compared with $870.7 million at the end of 2022.
Net cash provided by operating activities at the end of 2023 was $275.7 million compared with $182.7 million a year ago.
2024 Guidance
Envista provided 2024 guidance.
For the full year 2024, Envista expects core sales to grow by low-single digits. The Zacks Consensus Estimate for 2024 revenues is pegged at $2.60 billion.
Adjusted EBITDA margins are expected to be 16-17%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -16.37% due to these changes.
VGM Scores
Currently, Envista has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Envista has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Envista belongs to the Zacks Medical - Products industry. Another stock from the same industry, Boston Scientific (BSX - Free Report) , has gained 4.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Boston Scientific reported revenues of $3.73 billion in the last reported quarter, representing a year-over-year change of +14.9%. EPS of $0.55 for the same period compares with $0.45 a year ago.
For the current quarter, Boston Scientific is expected to post earnings of $0.51 per share, indicating a change of +8.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Boston Scientific. Also, the stock has a VGM Score of C.
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Envista (NVST) Down 5.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Envista (NVST - Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Envista due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Envista Q4 Earnings Miss Estimates, Margins Down
Envista reported fourth-quarter 2023 adjusted earnings per share of 29 cents, down 44.2% year over year. The bottom line missed the Zacks Consensus Estimate by 12.1%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, goodwill and intangible asset impairment, among others.
The company’s loss from continuing operations was $1.27 in the quarter compared with the year-ago quarter’s EPS of 45 cents.
For the full year, adjusted earnings were $1.53 per share, reflecting a 21.2% fall from the year-ago period. It also missed the Zacks Consensus Estimate by 3.2%.
Revenues in Detail
Revenues totaled $645.6 million in the reported quarter, down 2.3% year over year. However, the metric topped the Zacks Consensus Estimate by 2.3%.
Total revenues for 2023 were $2.57 billion, dropping 0.1% from the year-ago period’s levels. The figure beat the Zacks Consensus Estimate by 0.8%.
Segments in Detail
In the fourth quarter, Speciality Products & Technologies totaled $415.9 million, up 4.4%. Within the segment, Envista’s Orthodontic business rose nearly 15%, with Spark continuing to outperform.
Revenues in the Equipment & Consumables segment fell 12.5% year over year to $229.7 million in the quarter under review. The downside was primarily due to the timing of orders in the North American distribution channel.
Operational Update
Gross profit in the reported quarter fell 8.3% year over year to $335.9 million.
Gross margin contracted 339 basis points (bps) to 52%.
Selling, general and administrative expenses were up 2.6% year over year to $260.2 million. Research and development expenses fell 17.9% year over year to $20.2 million.
Operating profit of $55.5 million fell 36.9% year over year. The operating margin contracted 472 bps to 8.6%.
Financial Update
Envista ended 2023 with cash and cash equivalents of $940 million compared with $606.9 million at the end of 2022. Total long-term debt was $1.39 billion at the end of 2023 compared with $870.7 million at the end of 2022.
Net cash provided by operating activities at the end of 2023 was $275.7 million compared with $182.7 million a year ago.
2024 Guidance
Envista provided 2024 guidance.
For the full year 2024, Envista expects core sales to grow by low-single digits. The Zacks Consensus Estimate for 2024 revenues is pegged at $2.60 billion.
Adjusted EBITDA margins are expected to be 16-17%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -16.37% due to these changes.
VGM Scores
Currently, Envista has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Envista has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Envista belongs to the Zacks Medical - Products industry. Another stock from the same industry, Boston Scientific (BSX - Free Report) , has gained 4.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Boston Scientific reported revenues of $3.73 billion in the last reported quarter, representing a year-over-year change of +14.9%. EPS of $0.55 for the same period compares with $0.45 a year ago.
For the current quarter, Boston Scientific is expected to post earnings of $0.51 per share, indicating a change of +8.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Boston Scientific. Also, the stock has a VGM Score of C.