SOLVENTUM CORP (SOLV) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SOLV - US83444M1018 - Common Stock
78.13 USD
-0.88 (-1.11%)
We assign a fundamental rating of 4 out of 10 to SOLV. SOLV was compared to 184 industry peers in the Health Care Equipment & Supplies industry. There are concerns on the financial health of SOLV while its profitability can be described as average. SOLV is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year SOLV was profitable.
- In the past year SOLV had a positive cash flow from operations.
1.2 Ratios
- Looking at the Return On Assets, with a value of 10.91%, SOLV belongs to the top of the industry, outperforming 95.11% of the companies in the same industry.
- With an excellent Return On Equity value of 30.57%, SOLV belongs to the best of the industry, outperforming 98.91% of the companies in the same industry.
- SOLV has a better Return On Invested Capital (5.13%) than 76.63% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SOLV is in line with the industry average of 8.81%.
- The last Return On Invested Capital (5.13%) for SOLV is well below the 3 year average (9.85%), which needs to be investigated, but indicates that SOLV had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.91% | ||
| ROE | 30.57% | ||
| ROIC | 5.13% |
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
- SOLV's Profit Margin of 18.14% is amongst the best of the industry. SOLV outperforms 94.02% of its industry peers.
- SOLV's Profit Margin has declined in the last couple of years.
- The Operating Margin of SOLV (8.44%) is better than 76.09% of its industry peers.
- In the last couple of years the Operating Margin of SOLV has declined.
- SOLV's Gross Margin of 54.18% is in line compared to the rest of the industry. SOLV outperforms 50.54% of its industry peers.
- SOLV's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.44% | ||
| PM (TTM) | 18.14% | ||
| GM | 54.18% |
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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SOLV is destroying value.
- The number of shares outstanding for SOLV remains at a similar level compared to 1 year ago.
- SOLV has a worse debt/assets ratio than last year.
2.2 Solvency
- SOLV has an Altman-Z score of 1.98. This is not the best score and indicates that SOLV is in the grey zone with still only limited risk for bankruptcy at the moment.
- SOLV has a Altman-Z score (1.98) which is in line with its industry peers.
- The Debt to FCF ratio of SOLV is 102.74, which is on the high side as it means it would take SOLV, 102.74 years of fcf income to pay off all of its debts.
- SOLV's Debt to FCF ratio of 102.74 is fine compared to the rest of the industry. SOLV outperforms 66.30% of its industry peers.
- SOLV has a Debt/Equity ratio of 1.03. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.03, SOLV is not doing good in the industry: 75.54% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.03 | ||
| Debt/FCF | 102.74 | ||
| Altman-Z | 1.98 |
ROIC/WACC0.51
WACC10.1%
2.3 Liquidity
- SOLV has a Current Ratio of 1.50. This is a normal value and indicates that SOLV is financially healthy and should not expect problems in meeting its short term obligations.
- SOLV's Current ratio of 1.50 is on the low side compared to the rest of the industry. SOLV is outperformed by 73.91% of its industry peers.
- SOLV has a Quick Ratio of 1.14. This is a normal value and indicates that SOLV is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of SOLV (1.14) is worse than 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
- SOLV shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 108.76%, which is quite impressive.
- The earnings per share for SOLV have been decreasing by -31.19% on average. This is quite bad
- SOLV shows a small growth in Revenue. In the last year, the Revenue has grown by 2.28%.
- The Revenue has been growing slightly by 0.34% on average over the past years.
EPS 1Y (TTM)108.76%
EPS 3Y-31.19%
EPS 5YN/A
EPS Q2Q%-8.54%
Revenue 1Y (TTM)2.28%
Revenue growth 3Y0.34%
Revenue growth 5YN/A
Sales Q2Q%0.67%
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 4.39% on average per year.
- SOLV is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.73% yearly.
EPS Next Y-8.14%
EPS Next 2Y-1.56%
EPS Next 3Y1.68%
EPS Next 5Y4.39%
Revenue Next Year0.54%
Revenue Next 2Y-1.38%
Revenue Next 3Y0.15%
Revenue Next 5Y0.73%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 13.15 indicates a correct valuation of SOLV.
- Based on the Price/Earnings ratio, SOLV is valued cheaper than 91.85% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, SOLV is valued rather cheaply.
- SOLV is valuated correctly with a Price/Forward Earnings ratio of 12.05.
- Based on the Price/Forward Earnings ratio, SOLV is valued cheaper than 92.93% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, SOLV is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.15 | ||
| Fwd PE | 12.05 |
4.2 Price Multiples
- 83.70% 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 67.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 271.03 | ||
| EV/EBITDA | 13.97 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-1.56%
EPS Next 3Y1.68%
5. Dividend
5.1 Amount
- SOLV does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
SOLVENTUM CORP / SOLV FAQ
Can you provide the ChartMill fundamental rating for SOLVENTUM CORP?
ChartMill assigns a fundamental rating of 4 / 10 to SOLV.
What is the valuation status of SOLVENTUM CORP (SOLV) stock?
ChartMill assigns a valuation rating of 6 / 10 to SOLVENTUM CORP (SOLV). This can be considered as Fairly Valued.
Can you provide the profitability details for SOLVENTUM CORP?
SOLVENTUM CORP (SOLV) has a profitability rating of 5 / 10.
How financially healthy is SOLVENTUM CORP?
The financial health rating of SOLVENTUM CORP (SOLV) is 3 / 10.