Reasons to Retain Envista Stock in Your Portfolio for Now

Envista Holdings Corporation’s NVST rise in the third quarter of 2024 is backed by robust growth within the Specialty Products and Technologies business. Strategic acquisition deals look promising for growth. Meanwhile, a debt-burdened balance sheet and dull macroeconomic environment remain concerns for NVST’s operations.  In the past year, this Zacks Rank #3 (Hold) company’s shares have lost 8.8% against 17.3% growth of the industry. The S&P 500 composite rose 30.8% during the same time frame.The leading MedTech company has a market capitalization of $3.53 billion. Envista delivered an earnings surprise of 33.33% in the third quarter of 2024.Factors Benefiting Envista StockSpecialty Products and Technologies Business Grows:  Envista’s Speciality Products & Technologies business has been gaining momentum on the back of strategic development, manufacturing and marketing of dental implant systems, including re-generative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. The company is particularly gaining from growth within the Spark manufacturing technology. Envista recognized Spark to be its fastest-growing segment.The company’s orthodontic business grew mid-single digits in the third quarter, excluding Spark deferred revenues. The brackets and wire business experienced robust growth in Russia and China. Additionally, its value implant business witnessed mid-single-digit growth and an improving trend in Nobel. Strategic Acquisitions to Drive Growth: Envista's growth strategy anticipates future acquisitions and it continuously assesses potential buys that either strategically complement the company’s current portfolio or broaden it into new and lucrative economic sectors.Envista recently acquired Osteogenics Biomedical, the developer of innovative regenerative solutions for periodontists, oral & maxillofacial surgeons and clinicians involved in implant dentistry throughout the world.During the third quarter, DEXIS (currently operates as part of the Envista Equipment and Consumables segment) introduced several new offerings, including a new CBCT platform, enhanced software for the DEXIS intraoral scanner and additional surgical functionality in the DTX treatment planning platform. Management remains confident about DEXIS being a long-term growth driver for Envista.Factors Weighing on Envista StockPoor Macroeconomic Condition: Envista has been grappling with deteriorating international trade with global inflationary pressure leading to a challenging situation related to raw material and labor costs as well as freight charges and rising interest rates. Additionally, Russia’s invasion of Ukraine and the global response to this invasion, including sanctions imposed by the United States and other countries, could hurt the company’s overall business.These challenging macroeconomic conditions are resulting in a significant escalation in the company’s costs and expenses. During the third quarter of 2024, Envista’s SG&A expenses rose 5.1%. The company’s operating profit plummeted 75% year over year. Envista’s business was adversely impacted by exiting lower priority and more price-sensitive geographic markets in the third quarter. Sales of the Specialty Product and Technology and the Equipment and Consumable segment declined 5.2% and 5.6%, respectively, year over year.  Image Source: Zacks Investment ResearchWeak Solvency and Leveraged Balance Sheet: Envista ended the third quarter of 2024 with cash and cash equivalents of $991.3 million. Long-term debt totaled $1.31 billion, which was much higher than the quarter-end cash and cash equivalent level, indicating weak solvency. Meanwhile, the company had a short-term debt of $116 million at the end of the third quarter of 2024. The quarter’s total debt to capital was 31.6%, a moderately high level, indicating a leveraged balance sheet. NVST Stock Estimate TrendThe Zacks Consensus Estimate for 2024 earnings per share has moved north 1.4% to 72 cents in the past 30 days.The Zacks Consensus Estimate for 2024 revenues is pegged at $2.50 billion, implying a 2.5% decline from the year-ago reported number.Key PickSome better-ranked stocks in the broader medical space are Haemonetics HAE, Penumbra PEN and Globus Medical GMED.Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. HAE’s shares have risen 3.6% compared with the industry’s 19.9% growth in the past year.HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Penumbra, carrying a Zacks Rank #2 at present, has an estimated 2024 earnings growth rate of 33.5% compared with the industry’s 15.9%. Shares of Penumbra have risen 3.2% compared with the industry’s 14.5% growth in the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.Globus Medical, carrying a Zacks Rank #3 at present, has a long-term estimated growth rate of 14.1%. Shares of the company have rallied 81.8% compared with the industry’s 14.5% growth. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Haemonetics Corporation (HAE): Free Stock Analysis Report Globus Medical, Inc. (GMED): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis Report Envista Holdings Corporation (NVST): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks