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Here's Why You Should Invest in DENTSPLY (XRAY) Stock Now

Zacks Equity Research

DENTSPLY SIRONA Inc. XRAY has been gaining investor confidence on continued impressive results. In three month's time, the stock has rallied 26.5% compared with its industry’s and the S&P 500’s 15% and 12.5% growth, respectively.

Additionally, DENTSPLY has an impressive earnings surprise history, having outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 0.2%. Notably, this trend of consecutive beats underlines the company’s operating efficiency.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.

Factors That Bode Well

Emerging markets offer healthy growth opportunities for DENTSPLY, on a long-term basis. This is because they remain vastly untapped with low dental products penetration.

Growth in these markets is being driven by consumables, technology and equipment performance. DENTSPLY’s exceptional strength in its products, brands, clinical education, direct sales and marketing efforts have been providing it with a competitive edge in these places.

Last year, DENTSPLY opened several training facilities in places like Vietnam and Indonesia, and expanded its selling organizations in these high potential markets.

In the fourth quarter of 2018, revenues from the Rest of the World (ROW) inched up 1.4% on a year-over-year basis. In fact, the company foresees high-single-digit growth opportunities in the Asia Pacific, Latin America and China. Management expects contributions from emerging markets to continue in the quarters ahead.

In a bid to revolutionize digital-implant workflow in dental care, DENTSPLY recently launched a single tooth replacement solution — Azento — in the United States. By 2019, it will be available in Canada and Europe.

Azento reduces the risk of complications in single-tooth replacement procedures. It is a unique dental platform that will help dentists select the best-fitting implant, optimal implant positioning and feasible healing environment. It revolutionizes the digital implant workflow by restructuring implant-planning service, purchase and delivery.

A report by the Meticulous Research states that the global tooth replacement market is expected to reach $13,035.2 million by 2022, at a CAGR of 6.9%.

Which Way Are Estimates Trending?

The Zacks Consensus Estimate for 2019 earnings is pegged at $2.32, reflecting 15.4% growth year over year. The same for revenues stands at $4.02 billion, up 0.8% year over year.

DENTSPLY SIRONA Inc. Price and Consensus

 

DENTSPLY SIRONA Inc. Price and Consensus | DENTSPLY SIRONA Inc. Quote

Bottom Line

Despite cutthroat competition in the niche markets, DENTSPLY seems to be well-positioned for growth on strong guidance and solid product portfolio. The company's long-term earnings growth rate of 9.6% also supports this view.

Key Picks

A few better-ranked stocks from the MedTech space are Penumbra, Inc. PEN, Fluidigm Corporation FLDM and Tactile Systems Technology, Inc. TCMD, each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penumbra delivered a positive earnings surprise in each of the trailing four quarters, the average being 321.2%.

Fluidigm has a long-term earnings growth rate of 25%.

Tactile Systems has a long-term earnings growth rate of 20%.

Zacks' Top 10 Stocks for 2019

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