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Tariffs, freight costs and weak equipment demand could delay XRAY's revenue recovery and margin improvement.
DENTSPLY SIRONA (XRAY - Free Report) is well positioned for growth, driven by its investments in digital dentistry, R&D and commercial execution. However, weakness in CAD/CAM, implants and SureSmile, along with tariff and freight pressures, could weigh on near-term growth and profitability.
Shares of this Zacks Rank #3 (Hold) company have lost 11.3% year to date against the industry's 3.7% growth. The S&P 500 Index has also gained 10% in the same time frame.
XRAY, with a market capitalization of $1.96 billion, is a global leader in the design, development, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 5.6% over the next five years.
Image Source: Zacks Investment Research
Factors Favoring XRAY’s Growth
Digital Dentistry Ecosystem Strength: Dentsply Sirona continues to build its digital dentistry presence through Primescan scanners, Primeprint 3D printing and the DS Core cloud platform. Rather than positioning these as standalone products, the company is integrating them into connected workflows designed to reduce chair time and improve clinical consistency. Smart View-Detect, an FDA-cleared AI diagnostic aid for CBCT scans, further expands this ecosystem. DS Core’s interoperability with third-party systems can also support greater utilization across the installed base. New distributor agreements, including the Benco Dental arrangement, could further broaden market access and support higher-value digital revenue over time.
Clear Aligner Market Opportunity: The shift toward clear aligners and digital treatment planning provides a longer-term opportunity for SureSmile. Second-quarter 2026 Orthodontic and Implant Solutions sales declined to $197 million from $226 million a year earlier, partly due to the absence of Byte and weaker implant volumes, while SureSmile revenues fell double digits to $40 million. Management continues investing in Ortho on DS Core, sales training and dealer expansion. Improved execution could help SureSmile generate greater pull-through for scanners, imaging, software and related consumables.
Restructuring and Innovation Investments: Dentsply Sirona’s 2026 restructuring plan targets approximately $120 million in annualized cost savings, allowing the company to fund growth initiatives while improving cost discipline. In the second quarter of 2026, R&D spending rose 20.3% year over year to $45 million. Six dealer and distribution expansions year-to-date and new product launches, including those supporting Wellspect’s growth, could improve commercial reach and portfolio performance. If execution remains consistent, these initiatives may support a more stable growth and profitability profile.
Downsides for XRAY Stock
Soft Equipment and Capital Spending: Equipment-related demand remains pressured by higher financing costs and cautious spending among dental practices, particularly in the United States. In the second quarter of 2026, Connected Technology Solutions sales declined 3.8% in constant currency, while Americas sales fell 11.6%. Although APAC CTS delivered double-digit growth and Equipment and Instruments was broadly flat, weakness in larger-ticket categories remains a concern. EMEA distributor destocking also weighed on sell-in. New dealer partnerships are showing early traction, but management expects a more meaningful revenue contribution from these initiatives beginning in the fourth quarter of 2026. Continued softness in equipment demand could delay revenue recovery and operating leverage.
SureSmile and Byte-Related Pressure: The discontinued Byte business continues to weigh on year-over-year comparisons. Orthodontic and Implant Solutions sales declined 14.9% in constant currency in the second quarter, including an $18 million impact from the absence of Byte. SureSmile revenues declined double digits, primarily in the Americas, while lower implant volumes added further pressure. Management is expanding dealer access and investing in clinical education, but a sustained recovery will depend on stronger commercial execution. Prolonged weakness in SureSmile or implants could keep the segment under pressure.
Tariffs Weigh on Margins: Tariffs and broader macroeconomic uncertainty remain risks to margins. In the first quarter, adjusted EBITDA margin declined 430 basis points, while gross margin fell 560 basis points due to lower volumes, unfavorable mix and tariff impacts. Although Dentsply Sirona received $44 million in tariff refunds during the second quarter, gross profit was still pressured by lower volumes, unfavorable sales mix and incremental tariff impacts. Management also noted higher freight costs related to geopolitical tensions. Restructuring and cost controls are helping offset some pressure, but persistent or broader tariffs could delay margin recovery and potentially require additional pricing or sourcing adjustments.
Veracyte, currently sporting a Zacks Rank #1 (Strong Buy), reported second-quarter 2026 adjusted earnings per share (EPS) of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%.
Inspire Medical, currently sporting a Zacks Rank #1, reported second-quarter 2026 adjusted EPS of 14 cents, which beat the Zacks Consensus Estimate by 163.6%. Revenues of $200.6 million surpassed the Zacks Consensus Estimate by 2.9%.
INSP has an estimated long-term earnings growth rate of 10.6%. INSP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 195.9%.
Globus Medical, currently carrying a Zacks Rank #2 (Buy), reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.
View the Zacks #1 Rank List
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Reasons to Retain DENTSPLY SIRONA Stock in Your Portfolio for Now
Key Takeaways
DENTSPLY SIRONA (XRAY - Free Report) is well positioned for growth, driven by its investments in digital dentistry, R&D and commercial execution. However, weakness in CAD/CAM, implants and SureSmile, along with tariff and freight pressures, could weigh on near-term growth and profitability.
Shares of this Zacks Rank #3 (Hold) company have lost 11.3% year to date against the industry's 3.7% growth. The S&P 500 Index has also gained 10% in the same time frame.
XRAY, with a market capitalization of $1.96 billion, is a global leader in the design, development, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 5.6% over the next five years.
Image Source: Zacks Investment Research
Factors Favoring XRAY’s Growth
Digital Dentistry Ecosystem Strength: Dentsply Sirona continues to build its digital dentistry presence through Primescan scanners, Primeprint 3D printing and the DS Core cloud platform. Rather than positioning these as standalone products, the company is integrating them into connected workflows designed to reduce chair time and improve clinical consistency. Smart View-Detect, an FDA-cleared AI diagnostic aid for CBCT scans, further expands this ecosystem. DS Core’s interoperability with third-party systems can also support greater utilization across the installed base. New distributor agreements, including the Benco Dental arrangement, could further broaden market access and support higher-value digital revenue over time.
Clear Aligner Market Opportunity: The shift toward clear aligners and digital treatment planning provides a longer-term opportunity for SureSmile. Second-quarter 2026 Orthodontic and Implant Solutions sales declined to $197 million from $226 million a year earlier, partly due to the absence of Byte and weaker implant volumes, while SureSmile revenues fell double digits to $40 million. Management continues investing in Ortho on DS Core, sales training and dealer expansion. Improved execution could help SureSmile generate greater pull-through for scanners, imaging, software and related consumables.
Restructuring and Innovation Investments: Dentsply Sirona’s 2026 restructuring plan targets approximately $120 million in annualized cost savings, allowing the company to fund growth initiatives while improving cost discipline. In the second quarter of 2026, R&D spending rose 20.3% year over year to $45 million. Six dealer and distribution expansions year-to-date and new product launches, including those supporting Wellspect’s growth, could improve commercial reach and portfolio performance. If execution remains consistent, these initiatives may support a more stable growth and profitability profile.
Downsides for XRAY Stock
Soft Equipment and Capital Spending: Equipment-related demand remains pressured by higher financing costs and cautious spending among dental practices, particularly in the United States. In the second quarter of 2026, Connected Technology Solutions sales declined 3.8% in constant currency, while Americas sales fell 11.6%. Although APAC CTS delivered double-digit growth and Equipment and Instruments was broadly flat, weakness in larger-ticket categories remains a concern. EMEA distributor destocking also weighed on sell-in. New dealer partnerships are showing early traction, but management expects a more meaningful revenue contribution from these initiatives beginning in the fourth quarter of 2026. Continued softness in equipment demand could delay revenue recovery and operating leverage.
SureSmile and Byte-Related Pressure: The discontinued Byte business continues to weigh on year-over-year comparisons. Orthodontic and Implant Solutions sales declined 14.9% in constant currency in the second quarter, including an $18 million impact from the absence of Byte. SureSmile revenues declined double digits, primarily in the Americas, while lower implant volumes added further pressure. Management is expanding dealer access and investing in clinical education, but a sustained recovery will depend on stronger commercial execution. Prolonged weakness in SureSmile or implants could keep the segment under pressure.
Tariffs Weigh on Margins: Tariffs and broader macroeconomic uncertainty remain risks to margins. In the first quarter, adjusted EBITDA margin declined 430 basis points, while gross margin fell 560 basis points due to lower volumes, unfavorable mix and tariff impacts. Although Dentsply Sirona received $44 million in tariff refunds during the second quarter, gross profit was still pressured by lower volumes, unfavorable sales mix and incremental tariff impacts. Management also noted higher freight costs related to geopolitical tensions. Restructuring and cost controls are helping offset some pressure, but persistent or broader tariffs could delay margin recovery and potentially require additional pricing or sourcing adjustments.
DENTSPLY SIRONA Inc. Price
DENTSPLY SIRONA Inc. price | DENTSPLY SIRONA Inc. Quote
XRAY’s Estimate Trend
The Zacks Consensus Estimate for 2026 revenues is pegged at $3.57 billion, indicating a 3.1% decrease from the 2025 level.
The consensus mark for adjusted earnings per share is pinned at $1.56 for 2026, indicating a 2.5% year-over-year decline.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Veracyte (VCYT - Free Report) , Inspire Medical Systems (INSP - Free Report) and Globus Medical (GMED - Free Report) .
Veracyte, currently sporting a Zacks Rank #1 (Strong Buy), reported second-quarter 2026 adjusted earnings per share (EPS) of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%.
Inspire Medical, currently sporting a Zacks Rank #1, reported second-quarter 2026 adjusted EPS of 14 cents, which beat the Zacks Consensus Estimate by 163.6%. Revenues of $200.6 million surpassed the Zacks Consensus Estimate by 2.9%.
INSP has an estimated long-term earnings growth rate of 10.6%. INSP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 195.9%.
Globus Medical, currently carrying a Zacks Rank #2 (Buy), reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.