HSIC Growth is Better than Expected as Margins Show Improvement, Upgrade to Buy with $100 PT

研报英文原文证据摘录

HSIC Growth is Better than Expected as Margins Show Improvement, Upgrade to Buy with $100 PT

nts re-gaining trust in the HSIC brand, showing a recovery

from the cyber-security incident in 2023, we believe that the labor markets are FY26E EBITDA 1,147.00 1,180.00

healthy, and consumer demand is picking back up. While Medical growth was light FY27E EBITDA 1,211.00 1,255.00

in 1Q:26, other distributors such as Medline (MDLN, Buy, $55 PT) also reported Revenue (M)

a light flu season, which we view as temporary. We believe that HSIC's software FY Dec 2025A 2026E 2027E

platform is the best in the field, which creates a very sticky client base. Cloud-based

Q1 3,168.00 3,368.00A 3,494.00RESEARCH users increased +25% y/y in 1Q:26. We believe that consumer dental spending

continues to rise, dentists' economic confidence also appears to be rising, and a Q2 3,240.00 3,407.00 3,540.00

healthy labor market, with good job-adds is a longer term positive. We believe Q3 3,339.00 3,507.00 3,642.00

that HSIC sales reps act more as consultants than they do commission-based sales Q4 3,437.00 3,620.00 3,761.00

executives. These individuals can go into a client and, using data from the HSIC FY REV 13,184.00 13,902.00 14,436.00

software, determine how the dentist clients can drive more volumes and revenue. FY EV/S 0.9x 0.9x 0.9x

For example, building a crown in the office while a patient waits, or identifying

FY P/S 0.7x 0.7x 0.6x cavities using AI, to address in follow-up or same-day visits. These reps behave like

consultants that can pay for themselves, many times over. EBITDA (Adjusted)

FY Dec 2025A 2026E 2027E ■ Margins are improving under new leadership, with BOLD+1. Henry Schein is

undergoing a transformation. Management expects to reduce costs by ~$200M Q1 259.00 289.00A 317.00