DENTSPLY SIRONA XRAY is well-poised for growth due to its robust product portfolio and continued focus on research and development. However, forex remains a concern.

Shares of this Zacks Rank #3 (Hold) company have lost 46.4% year to date against the industry's 3.2% growth. The S&P 500 Index has gained 27.9% in the same time frame.

XRAY, with a market capitalization of $3.79 billion, is a global leader in the design, development, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. It anticipates earnings to improve 10.5% over the next five years.

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What's Favoring the Stock?

Third-quarter organic growth was driven by favorable timing in Essential Dental Solutions of approximately $20 million related to stocking orders in anticipation of U.S. ERP deployment and higher sales in CAD/CAM, which benefited from the launch of XRAY’s new scanner, Primescan 2.

Meanwhile, DENTSPLY SIRONA continues to expand its product portfolio, thereby enhancing its growth prospects. Compared to Primescan AC and Primescan Connect, Primescan 2 is likely to help medical practitioners expand their treatment offerings, save time in daily workflows, and deliver enhanced patient care and comfort.

XRAY launched Lucitone for Primeprint in January. This is expected to accelerate the adoption of 3D printing in dental practices. Recently, XRAY expanded its collaboration with A-dec, a private dental office furniture and equipment manufacturer. This partnership is aimed at introducing a new integrated product offering that combines Primescan Connect with select A-dec delivery systems.

During the third quarter, the company almost completed the second phase of its transformation plan, which should help drive profitable growth. XRAY is likely to incur $40-$50 million in non-recurring charges in the rest of 2024 as well as in 2025. The plan is anticipated to result in annualized cost savings of $80-$100 million over the next 12-18 months.

Continued growth in the Essential Dental Solutions segment, which includes Endo, Resto and Preventive products in the United States, is likely to aid the top line in the upcoming quarters. Moreover, rising international demand, especially in China and Canada, looks promising. Meanwhile, SureSmile product sales reflect sustained demand, which was up 6% during the third quarter. Global CAD/CAM grew mid-single digit percentage points due to increased sales of mills and intraoral scanners during the third quarter, a trend likely to continue going forward. The continued growth of Wellspect Healthcare products in Europe and the rest of the world bodes well.

What's Weighing on the Stock?

DENTSPLY SIRONA voluntary suspended sales, marketing and shipments of Byte aligners and impression kits while the company reviews certain regulatory requirements related to these products. Depending on the review, XRAY may discontinue some or all of its Byte business. Reduced conversion rates for Byte drove a sequential double-digit decline during the third quarter.

XRAY is facing macroeconomic headwinds in many regions. Capital equipment and electric procedure headwinds persisted through the third quarter, and the environment remains uncertain. Patient traffic was flat in the United States and Germany, while it declined in Japan and China.

Sales at Connected Technology Solutions were hurt during the third quarter due to softness in imaging, a trend that is likely to plague the segment for the rest of the year.

DENTSPLY SIRONA Inc. Price

DENTSPLY SIRONA Inc. price | DENTSPLY SIRONA Inc. Quote

Estimate Trend

The Zacks Consensus Estimate for 2024 revenues is pegged at $3.81 billion, indicating a 4% decrease from the 2023 level.

The consensus mark for adjusted earnings per share is pinned at $1.86 for 2024, indicating a 1.6% year-over-year improvement.

Stocks to Consider

Some better-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and AxoGen AXGN.

Masimo, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 48.6% compared with the industry’s 6.4% growth year to date.

Accuray, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.

ARAY’s shares have lost 25.8% against the industry’s 6.4% growth year to date.

AxoGen, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 252% for 2025. It delivered a trailing four-quarter average earnings surprise of 91.11%.

AXGN’s shares have risen 111.4% year to date compared with the industry’s 6.4% growth.

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