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Henry Schein (HSIC) Banks on Global Expansion Amid Macro Issues
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Henry Schein Inc. (HSIC - Free Report) is well positioned to gain from its extensive global foothold and diverse channel mix. Yet, macroeconomic concerns are adversely impacting the company’s operational results. The stock carries a Zacks Rank #3 (Hold) currently.
Henry Schein has strategically set up distribution centers worldwide to better serve customers and increase its operating efficiency. Apart from North America, the company has a presence in Australia and New Zealand as well as in emerging nations like China, Brazil, Israel, the Czech Republic and Poland. The growth in the healthcare distribution industry is a positive sign for its business, indicating growing awareness of the benefits of preventative care and oral hygiene. We believe Henry Schein’s worldwide reach provides it a major competitive advantage over other players in the industry.
In this regard, following last year's cyber incident, the dental and medical distribution businesses in North America and Europe showed a good pace of recovery. In the first quarter of 2024, the company’s Technology and Value-Added service sales grew 13.8% from the prior-year quarter levels. Sales growth in North America was primarily driven by value-added services, while international growth was driven by the Dental cloud-based solution.
Within the Dental business, the company aims to deliver customized solutions, leveraging market insights and technological advancements. Apart from this, it sells its own cost-effective consumable merchandise products and manufactures certain dental specialty products in the areas of implants, orthodontics and endodontics.
Of late, the company has been witnessing consistent demand for its implant systems, endodontic products, and integrated software and services solutions. Further, Henry Schein is organically gaining shares in the Global Dental specialties market, with acquisitions leading to significant growth across oral surgical, endodontics and orthodontics product lines.
Further, Henry Schein seems upbeat about its dental technology joint venture (JV), Henry Schein One. The dental software business has been progressing well, driving robust gains across its most core products, including practice management software, revenue cycle management, analytics and AI solutions.
On the flip side, the company’s fourth-quarter 2023 sales declined by an estimated $350 million-$400 million globally, with a cybersecurity incident affecting the operating income by nearly $120 million-$130 million. Henry Schein continued to experience a residual impact of the cyber events relating primarily to decreased sales to episodic customers (customers that generally had a less consistent demand), leading to an approximate 300-400 basis point decrease in internally generated local currency sales in the first quarter.
Further, the current macroeconomic environment across the globe is affecting Henry Schein’s financial operations. Particularly, exchange rate fluctuations, inflation and recession are adversely impacting the company’s operational results. Accordingly, governments and insurance companies continue to look for ways to contain the rising cost of healthcare. With sustained macroeconomic pressures, the company may struggle to keep in check its cost of revenues and operating expenses. In the first quarter, Henry Schein’s selling, general & administrative expenses rose 10.3% from the comparable 2023 figure. The rise in operating costs was driven by increases in payroll and payroll-related costs and travel and convention expenses in both of its reportable segments.
Hims & Hers Heath stock has surged 132.6% in the past year. Estimates for the company’s earnings have risen from 11 cents to 18 cents for 2024 and from 25 cents for 33 cents in 2025 in the past 30 days.
HIMS’ earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 79.2%. In the last reported quarter, it posted an earnings surprise of a staggering 150%.
Estimates for Medpace’s 2024 earnings per share have moved up to $11.29 from $11.23 in the past 30 days. Shares of the company have surged 81.8% in the past year compared with the industry’s 3.6% growth.
MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an earnings surprise of 30.6%.
Estimates for ResMed’s fiscal 2024 earnings per share have moved to $7.70 from $7.64 in the past 30 days. Shares of the company have declined 4.9% in the past year against the industry’s rise of 2.2%.
RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 10.9%.
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Henry Schein (HSIC) Banks on Global Expansion Amid Macro Issues
Henry Schein Inc. (HSIC - Free Report) is well positioned to gain from its extensive global foothold and diverse channel mix. Yet, macroeconomic concerns are adversely impacting the company’s operational results. The stock carries a Zacks Rank #3 (Hold) currently.
Henry Schein has strategically set up distribution centers worldwide to better serve customers and increase its operating efficiency. Apart from North America, the company has a presence in Australia and New Zealand as well as in emerging nations like China, Brazil, Israel, the Czech Republic and Poland. The growth in the healthcare distribution industry is a positive sign for its business, indicating growing awareness of the benefits of preventative care and oral hygiene. We believe Henry Schein’s worldwide reach provides it a major competitive advantage over other players in the industry.
In this regard, following last year's cyber incident, the dental and medical distribution businesses in North America and Europe showed a good pace of recovery. In the first quarter of 2024, the company’s Technology and Value-Added service sales grew 13.8% from the prior-year quarter levels. Sales growth in North America was primarily driven by value-added services, while international growth was driven by the Dental cloud-based solution.
Within the Dental business, the company aims to deliver customized solutions, leveraging market insights and technological advancements. Apart from this, it sells its own cost-effective consumable merchandise products and manufactures certain dental specialty products in the areas of implants, orthodontics and endodontics.
Henry Schein, Inc. Price
Henry Schein, Inc. price | Henry Schein, Inc. Quote
Of late, the company has been witnessing consistent demand for its implant systems, endodontic products, and integrated software and services solutions. Further, Henry Schein is organically gaining shares in the Global Dental specialties market, with acquisitions leading to significant growth across oral surgical, endodontics and orthodontics product lines.
Further, Henry Schein seems upbeat about its dental technology joint venture (JV), Henry Schein One. The dental software business has been progressing well, driving robust gains across its most core products, including practice management software, revenue cycle management, analytics and AI solutions.
On the flip side, the company’s fourth-quarter 2023 sales declined by an estimated $350 million-$400 million globally, with a cybersecurity incident affecting the operating income by nearly $120 million-$130 million. Henry Schein continued to experience a residual impact of the cyber events relating primarily to decreased sales to episodic customers (customers that generally had a less consistent demand), leading to an approximate 300-400 basis point decrease in internally generated local currency sales in the first quarter.
Further, the current macroeconomic environment across the globe is affecting Henry Schein’s financial operations. Particularly, exchange rate fluctuations, inflation and recession are adversely impacting the company’s operational results. Accordingly, governments and insurance companies continue to look for ways to contain the rising cost of healthcare. With sustained macroeconomic pressures, the company may struggle to keep in check its cost of revenues and operating expenses. In the first quarter, Henry Schein’s selling, general & administrative expenses rose 10.3% from the comparable 2023 figure. The rise in operating costs was driven by increases in payroll and payroll-related costs and travel and convention expenses in both of its reportable segments.
Key Picks
Some better-ranked stocks in the broader medical space are Hims & Hers Health (HIMS - Free Report) , Medpace (MEDP - Free Report) and ResMed (RMD - Free Report) . Each of these presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Hims & Hers Heath stock has surged 132.6% in the past year. Estimates for the company’s earnings have risen from 11 cents to 18 cents for 2024 and from 25 cents for 33 cents in 2025 in the past 30 days.
HIMS’ earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 79.2%. In the last reported quarter, it posted an earnings surprise of a staggering 150%.
Estimates for Medpace’s 2024 earnings per share have moved up to $11.29 from $11.23 in the past 30 days. Shares of the company have surged 81.8% in the past year compared with the industry’s 3.6% growth.
MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an earnings surprise of 30.6%.
Estimates for ResMed’s fiscal 2024 earnings per share have moved to $7.70 from $7.64 in the past 30 days. Shares of the company have declined 4.9% in the past year against the industry’s rise of 2.2%.
RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 10.9%.