SOLVENTUM CORP (SOLV) Stock Fundamental Analysis
NYSE:SOLV - New York Stock Exchange, Inc. - US83444M1018 - Common Stock - Currency: USD
Overall SOLV gets a fundamental rating of 3 out of 10. We evaluated SOLV against 187 industry peers in the Health Care Equipment & Supplies industry. SOLV has a medium profitability rating, but doesn't score so well on its financial health evaluation. SOLV is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
SOLV had positive earnings in the past year.
SOLV had a positive operating cash flow in the past year.
1.2 Ratios
SOLV's Return On Assets of 2.52% is fine compared to the rest of the industry. SOLV outperforms 75.40% of its industry peers.
With an excellent Return On Equity value of 10.43%, SOLV belongs to the best of the industry, outperforming 85.56% of the companies in the same industry.
SOLV has a Return On Invested Capital of 5.14%. This is in the better half of the industry: SOLV outperforms 77.54% of its industry peers.
SOLV had an Average Return On Invested Capital over the past 3 years of 9.85%. This is in line with the industry average of 8.03%.
The 3 year average ROIC (9.85%) for SOLV is well above the current ROIC(5.14%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.52% | ||
| ROE | 10.43% | ||
| ROIC | 5.14% |
ROA(3y)7.62%
ROA(5y)N/A
ROE(3y)13.05%
ROE(5y)N/A
ROIC(3y)9.85%
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 4.53%, SOLV is doing good in the industry, outperforming 74.33% of the companies in the same industry.
In the last couple of years the Profit Margin of SOLV has declined.
Looking at the Operating Margin, with a value of 9.56%, SOLV is in the better half of the industry, outperforming 77.01% of the companies in the same industry.
In the last couple of years the Operating Margin of SOLV has declined.
SOLV has a Gross Margin of 54.64%. This is comparable to the rest of the industry: SOLV outperforms 49.73% of its industry peers.
In the last couple of years the Gross Margin of SOLV has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.56% | ||
| PM (TTM) | 4.53% | ||
| GM | 54.64% |
OM growth 3Y-16.68%
OM growth 5YN/A
PM growth 3Y-31.26%
PM growth 5YN/A
GM growth 3Y-2.48%
GM growth 5YN/A
2. Health
2.1 Basic Checks
SOLV has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, SOLV has about the same amount of shares outstanding.
The debt/assets ratio for SOLV is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.49, we must say that SOLV is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of SOLV (1.49) is comparable to the rest of the industry.
SOLV has a debt to FCF ratio of 53.16. This is a negative value and a sign of low solvency as SOLV would need 53.16 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 53.16, SOLV is in the better half of the industry, outperforming 66.31% of the companies in the same industry.
A Debt/Equity ratio of 2.14 is on the high side and indicates that SOLV has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.14, SOLV is doing worse than 86.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 53.16 | ||
| Altman-Z | 1.49 |
ROIC/WACC0.63
WACC8.15%
2.3 Liquidity
A Current Ratio of 1.22 indicates that SOLV should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.22, SOLV is doing worse than 82.89% of the companies in the same industry.
SOLV has a Quick Ratio of 1.22. This is a bad value and indicates that SOLV is not financially healthy enough and could expect problems in meeting its short term obligations.
SOLV has a Quick ratio of 0.86. This is amonst the worse of the industry: SOLV underperforms 85.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
SOLV shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -64.49%.
The earnings per share for SOLV have been decreasing by -31.19% on average. This is quite bad
Looking at the last year, SOLV shows a small growth in Revenue. The Revenue has grown by 2.21% in the last year.
Measured over the past years, SOLV shows a small growth in Revenue. The Revenue has been growing by 0.34% on average per year.
EPS 1Y (TTM)-64.49%
EPS 3Y-31.19%
EPS 5YN/A
EPS Q2Q%8.33%
Revenue 1Y (TTM)2.21%
Revenue growth 3Y0.34%
Revenue growth 5YN/A
Sales Q2Q%3.84%
3.2 Future
Based on estimates for the next years, SOLV will show a small growth in Earnings Per Share. The EPS will grow by 1.09% on average per year.
The Revenue is expected to grow by 1.34% on average over the next years.
EPS Next Y-14.97%
EPS Next 2Y-4.91%
EPS Next 3Y1.09%
EPS Next 5YN/A
Revenue Next Year2.33%
Revenue Next 2Y0.67%
Revenue Next 3Y1.34%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.75, the valuation of SOLV can be described as reasonable.
Based on the Price/Earnings ratio, SOLV is valued cheaply inside the industry as 90.37% of the companies are valued more expensively.
SOLV's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.93.
The Price/Forward Earnings ratio is 11.81, which indicates a very decent valuation of SOLV.
89.84% of the companies in the same industry are more expensive than SOLV, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.31, SOLV is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.75 | ||
| Fwd PE | 11.81 |
4.2 Price Multiples
78.61% of the companies in the same industry are more expensive than SOLV, based on the Enterprise Value to EBITDA ratio.
SOLV's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SOLV is cheaper than 70.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 84.06 | ||
| EV/EBITDA | 14.96 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-4.91%
EPS Next 3Y1.09%
5. Dividend
5.1 Amount
SOLV does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
71.42
-1.78 (-2.43%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.73%
Inst Owner ChangeN/A
Ins Owners0.1%
Ins Owner Change0.24%
Market Cap12.36B
Analysts73.68
Price Target86.74 (21.45%)
Short Float %2.78%
Short Ratio4.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.33%
Min EPS beat(2)7.57%
Max EPS beat(2)15.09%
EPS beat(4)4
Avg EPS beat(4)10.65%
Min EPS beat(4)4.59%
Max EPS beat(4)15.36%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.32%
Min Revenue beat(2)-0.05%
Max Revenue beat(2)0.68%
Revenue beat(4)1
Avg Revenue beat(4)-0.22%
Min Revenue beat(4)-0.81%
Max Revenue beat(4)0.68%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)3.5%
PT rev (3m)5.78%
EPS NQ rev (1m)0.23%
EPS NQ rev (3m)4.08%
EPS NY rev (1m)0%
EPS NY rev (3m)0.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.75 | ||
| Fwd PE | 11.81 | ||
| P/S | 1.47 | ||
| P/FCF | 84.06 | ||
| P/OCF | 21.09 | ||
| P/B | 3.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.96 |
EPS(TTM)6.08
EY8.51%
EPS(NY)6.05
Fwd EY8.47%
FCF(TTM)0.85
FCFY1.19%
OCF(TTM)3.39
OCFY4.74%
SpS48.48
BVpS21.07
TBVpS-22.72
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.52% | ||
| ROE | 10.43% | ||
| ROCE | 6.44% | ||
| ROIC | 5.14% | ||
| ROICexc | 5.36% | ||
| ROICexgc | 14.61% | ||
| OM | 9.56% | ||
| PM (TTM) | 4.53% | ||
| GM | 54.64% | ||
| FCFM | 1.75% |
ROA(3y)7.62%
ROA(5y)N/A
ROE(3y)13.05%
ROE(5y)N/A
ROIC(3y)9.85%
ROIC(5y)N/A
ROICexc(3y)10.1%
ROICexc(5y)N/A
ROICexgc(3y)49.33%
ROICexgc(5y)N/A
ROCE(3y)12.33%
ROCE(5y)N/A
ROICexcg growth 3Y-14.04%
ROICexcg growth 5YN/A
ROICexc growth 3Y-12.55%
ROICexc growth 5YN/A
OM growth 3Y-16.68%
OM growth 5YN/A
PM growth 3Y-31.26%
PM growth 5YN/A
GM growth 3Y-2.48%
GM growth 5YN/A
F-Score4
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 53.16 | ||
| Debt/EBITDA | 5.85 | ||
| Cap/Depr | 82.21% | ||
| Cap/Sales | 5.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 43.86% | ||
| Profit Quality | 38.68% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | 1.49 |
F-Score4
WACC8.15%
ROIC/WACC0.63
Cap/Depr(3y)54.53%
Cap/Depr(5y)N/A
Cap/Sales(3y)3.74%
Cap/Sales(5y)N/A
Profit Quality(3y)131.71%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-64.49%
EPS 3Y-31.19%
EPS 5YN/A
EPS Q2Q%8.33%
EPS Next Y-14.97%
EPS Next 2Y-4.91%
EPS Next 3Y1.09%
EPS Next 5YN/A
Revenue 1Y (TTM)2.21%
Revenue growth 3Y0.34%
Revenue growth 5YN/A
Sales Q2Q%3.84%
Revenue Next Year2.33%
Revenue Next 2Y0.67%
Revenue Next 3Y1.34%
Revenue Next 5YN/A
EBIT growth 1Y-47.75%
EBIT growth 3Y-16.4%
EBIT growth 5YN/A
EBIT Next Year11.7%
EBIT Next 3Y5.54%
EBIT Next 5YN/A
FCF growth 1Y-50.46%
FCF growth 3Y-25.22%
FCF growth 5YN/A
OCF growth 1Y-38.12%
OCF growth 3Y-18.66%
OCF growth 5YN/A