Reasons to Retain Envista Stock in Your Portfolio for Now

Envista Holdings Corporation’s NVST fourth-quarter performance is driven by growth in businesses within the Specialty Products & Technologies segment, especially the Spark business. The company’s strategic efforts to bolster long-term growth look impressive. Meanwhile, a debt-burdened balance sheet and unfavorable foreign exchange remain concerns for NVST’s operations. In the past year, this Zacks Rank #3 (Hold) company’s shares have lost 13.7% against 11.3% growth of the industry. The S&P 500 composite rose 14.4% during the same time frame.The leading MedTech company has a market capitalization of $3.21 billion. Envista delivered an earnings surprise of 4.35% in the fourth quarter of 2024.Factors Benefiting Envista StockBusiness Within Specialty Products and Technologies Segment Grows:  Envista’s business within the Specialty Products & Technologies segment is gaining momentum on the back of strategic development, manufacturing and marketing of dental implant systems. The company is particularly gaining from growth within the Spark manufacturing technology. In 2024 Envista launched Spark in six different countries. During the fourth quarter of 2024, the company’s brackets and wire business grew low single digits, with solid improvements in North America and Europe. Additionally, its value implant business witnessed another quarter of strong growth and an improving trend in Nobel in North America. The full arch category experienced strong growth in the quarter.Strategic Initiatives Look Encouraging:  Envista remains focused on three key priorities to improve its short-term execution and build the foundation for long-term value creation. First, the company plans to accelerate its orthodontic business by providing orthodontic specialists with a differentiated and integrated suite of treatment options, including Brackets & Wires and Clear Aligners. It continues to drive sequential margin improvements in its Spark business throughout 2024.The second area of focus is driving the growth of its implant business. NVST continues to make growth investments in its largest and most profitable business, Nobel Biocare, which was able to return to growth in the fourth quarter.Third, as Envista moves through 2024, it relaunched the Envista Business System (“EBS”) to optimize its cost structure. As per management, the improvement in gross margin for six consecutive quarters can be attributed to the EBS approach.Together, these strategic initiatives are working well for the company. For instance, in 2024, Envista saw a double-digit reduction in consumables inventory through the use of dynamic kanbans and improved overstock visibility without affecting service levels. The company continues to experience strong contributions from EBS. Factors Weighing on Envista StockWeak Solvency and Leveraged Balance Sheet: Envista ended 2024 with cash and cash equivalents of $1.07 billion. Long-term debt totaled $1.28 billion, higher than the quarter-end cash and cash equivalent level, indicating weak solvency. The quarter’s total debt to capital was 32.2%, a moderately high level that indicates a leveraged balance sheet. Image Source: Zacks Investment ResearchForeign Exchange Impacting Sales: Significant portions of Envista's sales and costs are exposed to changes in foreign exchange rates. The company’s operations use multiple foreign currencies, including the euro, British pound, Brazilian real, Australian dollar, Japanese yen, Canadian dollar and Chinese yuan. Changes in those currencies relative to the U.S. dollar should affect its sales, cost of sales and expenses, and consequently, net income.NVST Stock Estimate TrendThe Zacks Consensus Estimate for 2025 earnings per share has moved south 10.7% to $1.10 in the past 30 days.The Zacks Consensus Estimate for 2025 revenues is pegged at $2.52 billion, implying a 0.4% rise from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 62.2% compared with the industry’s 17.2%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. Its shares have surged 68.2% compared with the industry’s 12.5% growth in the past year.PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 2.7% compared with the industry’s 1.5%. Shares of the company have rallied 54.4% in the past year compared with the industry’s growth of 11.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%.Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.5%. Shares of the company have rallied 12.1% in the past year against the industry’s 3.6% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>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 Boston Scientific Corporation (BSX): Free Stock Analysis Report Cardinal Health, Inc. (CAH): Free Stock Analysis Report Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report Envista Holdings Corporation (NVST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks