Dentsply stock reprices itself

Share of global dental supplier Dentsply (NASDAQ: XRAY) fell worse than benchmark indices this year (-34%). The maker of SureSmile clear dental aligner systems has diversified its portfolio with the acquisition of Byte and Propel Orthodontics. The company admittedly had a disappointing start to the year, plagued by global supply chain disruptions, COVID restrictions in China, the Russian conflict in Ukraine and unfavorable exchange rates. These headwinds are expected to continue and have been factored into the downgraded full-year 2022 downturn. Inflationary pressures pushed operating margins down to 15.9% in the first quarter, partially offset by price increases. China’s sales have been hampered by the lockdowns and COVID restrictions in China. European sales were strong with 7% organic growth. The US was the main downfall for profits. Shares trade at 15.3x future earnings compared to major competitor Align Technologies (NASDAQ: ALGN) stocks which trade at 27.5x future earnings. The company still believes most of the headwinds are transient as margins are expected to improve by more than 17% for the full year. Cautious investors seeking exposure in the clear aligner dental segment can look forward to opportunistic pullbacks in Dentsply stocks.

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Q1 Fiscal Year 2023 Profit Release

On May 10, 2022, Dentsply announced its first quarter 2022 results for the first quarter of 2022. The company reported earnings per share (EPS) of $0.52 excluding one-time items that miss consensus analyst estimates for earnings of $0.54 each (-$0.02). Revenues were down (-6.1%) year-over-year (year-on-year) to $45 million, falling short of consensus analyst estimates of $980 million. John Groetelaars, CEO of Dentsply said: “The first quarter was a challenging quarter, and our financial performance and revised outlook reflect the impact of greater-than-expected macroeconomic headwinds and lower-than-expected performance in the United States. Despite these challenges, organic growth in Europe has been robust, demand remains strong and our teams are working diligently to reduce lead times to address supply chain challenges.”

Disadvantage guidance

Dentsply provided downside guidance for the fiscal full-year 2022 EPS of $2.35 to $2.55, down from $3.05 to $3.25 in previous guidance, versus $2.79 consensus analyst estimates. Fiscal revenue for the full year 2022 is expected to be between $4.1 billion and $4.2 billion, down from $4.3 billion to $4.4 billion in previous estimates) versus $4.24 billion by consensus analyst estimates .

Takeaway for conference calls

Interim CEO Groetelaars admitted that Q1 was a disappointing quarter that impacted global supply chain disruption and “unfavorable” exchange rates. The US was hardest hit as Europe delivered 7% organic growth, driven by SureSmile and implants. The total clear aligner business experienced double-digit sequential growth in the quarter. The operating margin was 15.9%, impacted by lower production volume and inflationary pressures. Dentsply Interim CFO Barbara Bodem provided more insight into the figures. Organic sales decreased (-1.4%) in the first quarter of 2022, while sales decreased (-6.1%). Regions outside the US showed health growth. Supply chain disruptions particularly impacted imaging despite strong demand, as evidenced by the high order book. Byte unique visitor traffic reached an all-time high in March 2022. Gross margins declined 280 bps. She pointed out: “We attribute about 60% of the year-over-year decline to transient macro challenges from foreign exchange, inflationary pressures and the impact of COVID in China. As a result, adjusted earnings per share were $0.52 versus $0.72 in the year-ago quarter.” The softness of patient volume was attributed to COVID-19, particularly in China. She still expected margins for fiscal year 2022 to bounce back above 17%.

XRAY Opportunistic Withdrawal Levels

Using the gun charts on the weekly and daily frames gives a clearer picture of the landscape for XRAY stocks. The weekly gun chart peaked at the Fibonacci (fib) level of $49.29 before plummeting. The downtrend in the weekly gun chart has a declining 5-period moving average (MA) at $39.48 with weekly lower Bollinger Bands (BBs) at $32.90. The weekly stochastic is just below the 10 band. The weekly market structure low (MSL) is causing a breakout to $40.12. The daily gun chart has a make or break with a flat 5-period MA at $38.19 and a 15-period at $39.21 as stochastic attempts to form a mini pup. The daily lower BBs are $35.62. The daily 50-period MA resistance is at $45.02 and the upper BBs are at $43.76. Cautious investors may wait for opportunistic pullback levels at $35.87 fib, $33.91 fib, $33.06 fib, $31.58 fib, $30.23 fib, $29.43 fib, $27.46 fib and the $26.20 fib level. Upward trajectories range from the $45.17 fib level to the $52.13 fib level.

Dentsply stock reprices itself


This post Dentsply stock reprices itself was original published at “https://www.entrepreneur.com/article/428329”

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