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Reasons to Retain Envista Stock in Your Portfolio for Now

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Envista Holdings Corporation’s (NVST - Free Report) well-focused international expansion is expected to drive growth in the upcoming quarters. 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 18.5% against 9.1% growth of the industry. The S&P 500 composite rose 23.7% during the same time frame.

The leading MedTech company has a market capitalization of $3.30 billion. Envista delivered an earnings surprise of 33.33% in the third quarter of 2024.

Factors Benefiting Envista Stock

Focus on International Market Expansion:  Envista reaches over 250,000 dental professionals annually through more than 4,000 training and education events it directly organizes. Envista established strong relationships globally with key constituencies, including DSOs, dental specialists, general dentists and dental laboratories. It did so through its trusted brands, innovative product offerings and comprehensive customer service. The continuing expansion of NVST's global commercial organization should provide it with significant growth opportunities as it increases its penetration in various geographic markets.

During the third quarter, the company's consumable business grew mid-single digits in Europe and double digits in Russia. The company’s premium implant business was slightly up in Europe. Within the orthodontic segment, the traditional bracket and wire business saw a solid uptick in Russia and China.

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 further accelerate its orthodontic business by providing orthodontic specialists with a differentiated and integrated suite of treatment options, including Brackets & Wires and Clear Aligners. 

The second area of focus is driving the growth of its implant business. Globally, Envista plans to position its premium and value implant franchises to provide full solutions across the implant workflow, including regenerative and prosthetic offerings. Third, Envista currently utilizes its premier diagnostics and digital capabilities to create differentiation and win customers.

As per the latest update, Envista continues to make growth investments in its largest and most profitable business — Nobel Biocare. 

Factors Weighing on Envista Stock

Foreign 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 these currencies relative to the U.S. dollar will impact its sales, cost of sales and expenses, and consequently, net income.

 

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Weak Solvency: Envista ended the third quarter of 2024 with cash and cash equivalents of $991.3 million. Long-term debt totaled $1.31 billion, much higher than the quarter-end cash and cash equivalent level, indicating weak solvency. 

NVST Stock Estimate Trend

The Zacks Consensus Estimate for 2025 earnings per share has remained unchanged at $1.12 in the past 30 days.

The Zacks Consensus Estimate for 2025 revenues is pegged at $2.56 billion, implying a 2.4% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Veracyte (VCYT - Free Report) , Omnicell (OMCL - Free Report) and ResMed (RMD - Free Report) .

Veracyte's estimated 2025 earnings growth rate is 65.8% compared with the industry’s 21.9%. Its shares have risen 49.2% in the past year compared with the industry’s 5.5% growth. VCYT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 520.58%. 

VCYT carries a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 3.7% compared with the industry’s 9.5%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 121.74%. OMCL’s shares have risen 15.2% against the industry’s 16.8% decline in the past year.

ResMed, carrying a Zacks Rank 2 at present, has an estimated earnings growth rate of 8.9% for fiscal 2025. Its shares have surged 33.4% compared with the industry’s 11.1% growth in the past year. RMD’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.41%.

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