Let’s dig into the relative performance of Dentsply Sirona (NASDAQ: XRAY) and its peers as we unravel the now-completed Q2 dental equipment & technology earnings season.
The dental equipment and technology industry encompasses companies that manufacture orthodontic products, dental implants, imaging systems, and digital tools for dental professionals. These companies benefit from recurring revenue streams tied to consumables, ongoing maintenance, and growing demand for aesthetic and restorative dentistry. However, high R&D costs, significant capital investment requirements, and reliance on discretionary spending make them vulnerable to economic cycles. Over the next few years, tailwinds for the sector include innovation in digital workflows, such as 3D printing and AI-driven diagnostics, which enhance the efficiency and precision of dental care. However, headwinds include economic uncertainty, which could reduce patient spending on elective procedures, regulatory challenges, and potential pricing pressures from consolidated dental service organizations (DSOs).
The 4 dental equipment & technology stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.3% since the latest earnings results.
Dentsply Sirona (NASDAQ: XRAY)
With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ: XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.
Dentsply Sirona reported revenues of $936 million, down 4.9% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ full-year EPS guidance estimates but a miss of analysts’ constant currency revenue estimates.
"I see tremendous opportunity at Dentsply Sirona and I am looking forward to digging in with the team to increase our customer-centric focus and to direct investments in areas that will generate sustainable growth," said Dan Scavilla, Chief Executive Officer.
Dentsply Sirona delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 5.1% since reporting and currently trades at $12.96.
Is now the time to buy Dentsply Sirona? Access our full analysis of the earnings results here, it’s free.
Best Q2: Envista (NYSE: NVST)
Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE: NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals.
Envista reported revenues of $682.1 million, up 7.7% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with a solid beat of analysts’ constant currency revenue and full-year EPS guidance estimates.
Envista pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $20.84.
Is now the time to buy Envista? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Align Technology (NASDAQ: ALGN)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ: ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Align Technology reported revenues of $1.01 billion, down 1.6% year on year, falling short of analysts’ expectations by 4.8%. It was a disappointing quarter as it posted a miss of analysts’ sales volume and EPS estimates.
Align Technology delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 36.9% since the results and currently trades at $129.
Read our full analysis of Align Technology’s results here.
Henry Schein (NASDAQ: HSIC)
With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ: HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.
Henry Schein reported revenues of $3.24 billion, up 3.3% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates.
The stock is down 1.3% since reporting and currently trades at $69.21.
Read our full, actionable report on Henry Schein here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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