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Valued at a market cap of $8.8 billion, Henry Schein, Inc. (HSIC) provides healthcare products and services to dental practitioners, laboratories, physician practices, ambulatory surgery centers, government, institutional healthcare clinics, and other alternate care clinics. The Melville, New York-based company’s businesses, including Dental, Medical and Technology, and Value-Added Services, serve millions of customers worldwide.
Companies valued at less than $10 billion are typically classified as “mid-cap stocks,” and Henry Schein fits the label perfectly. The healthcare company is recognized for its excellent customer service, highly competitive prices, and innovative value-added solutions. It co-founded the Pandemic Supply Chain Network (PSCN), a public-private partnership that helps strengthen the global health supply chain.
Despite its strengths, the company has slipped 14.8% from its 52-week high of $82.63, achieved on Feb. 27. Moreover, it has declined 3.8% over the past three months, lagging behind the broader S&P 500 Index’s ($SPX) nearly 4.1% gain over the same time frame.
Moreover, in the longer term, HSIC has fallen almost 7.2% over the past 52 weeks, massively underperforming SPX’s 24.9% returns. However, over the past six months, shares of HSIC are up 9.9%, slightly surpassing SPX’s 8.9% gains over the same time frame.
To confirm its bearish trend, HSIC has been trading below its 200-day moving average since late December and has remained below its 50-day moving average since mid-December.
On Nov. 5, shares of HSIC plunged 4.6% after its mixed Q3 earnings release. The company’s adjusted EPS declined 7.6% year-over-year to $1.22 but surpassed the consensus estimates by 5.2%. On the other hand, its revenue of $3.17 billion slightly increased from the year-ago quarter but missed the consensus estimates by 2.2%. A decline in distribution business and personal protective equipment sales, primarily due to lower glove pricing and slower-than-expected recovery from last year’s cyber incident, contributed to the revenue miss.
HSIC’s underperformance becomes more evident when compared to its rival, Patterson Companies, Inc. (PDCO), which gained 8.1% over the past 52 weeks and 29.8% over the past six months.
Despite Henry Schein’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 13 analysts covering it, and the mean price target of $74.75 suggests a 6.1% premium to its current levels.
