One-glance verdict
Undervalued
$204.91 our estimate vs market $90.08
Wall Street consensus: $97.69 (-52.3% lower than our fair-value estimate)
56% below our estimate, below the bear case
Fundamentals snapshot
Solventum Corporation
SOLV · NYQ · Healthcare · Medical Instruments & Supplies
Current price
$90.08
52-week range
$62.38 - $94.16
Market cap
$15.31B
Balance sheet
Stretched
1.82x Concerning
Net debt $4.84B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Returns 3.2% on equity, ahead of 16% of its peers.
- Reward Free cash flow was positive in 3/10 years.
- Risk Stock trades 516.1% above its 5-year average P/E.
- Risk Operating margin compressed from 20.8% to 5.5% over 3 years.
What this company does
Solventum Corporation
Solventum, a healthcare company, makes and sells a range of products for hospitals and dentists, from wound care supplies and surgical tools to dental equipment and software that helps manage patient information. The money they make mainly comes from selling these medical and dental supplies and services to healthcare providers. This matters because it shows how they're serving important needs in the healthcare system with their inventions.
How the company got here
Solventum Corporation is a relatively new company, officially incorporated in 2023. It was formerly part of 3M's Health Care Business Group before being spun off as an independent entity. This separation allows Solventum to focus specifically on its healthcare solutions, aiming to bring innovation and efficiency to the medical and dental fields. The spin-off was designed to unlock value by creating a more agile and specialized company.
What it actually does
Solventum develops, makes, and sells a variety of products and software designed to help patients and healthcare providers. Think of things that doctors and dentists use every day, from bandages that help wounds heal faster to tools for cleaning teeth and software that helps hospitals manage patient information. The company aims to improve patient care and make healthcare operations smoother through its diverse offerings.
Medsurg
The Medsurg segment provides a wide array of products for medical and surgical care. This includes advanced wound care solutions, like special dressings and therapies that help wounds heal better and faster, as well as products for managing IV lines and ensuring surgical tools are properly sterilized. They also offer items like stethoscopes and medical tapes, essentially covering many of the essential supplies used in hospitals and clinics for patient treatment and procedures. This segment appears to be a significant part of Solventum's business, offering a broad range of critical medical supplies.
Dental Solutions
This part of Solventum focuses on products for dentists and orthodontists. They offer everything from braces and clear aligners (like Invisalign) to materials used for filling cavities and keeping teeth healthy. The goal is to provide solutions that cover a patient's entire dental journey, from preventative care to complex orthodontic treatments. This segment caters to dental professionals looking for a comprehensive range of tools and materials for their practices.
Health Information Systems
Solventum's Health Information Systems segment provides software to healthcare organizations. This software helps with tasks like documenting patient visits, ensuring medical codes are accurate for billing, and visualizing important health data. Essentially, it's technology designed to make the administrative and record-keeping side of healthcare more efficient and accurate. This helps hospitals and clinics manage patient information and billing processes more effectively.
What management is betting on now
Solventum's management is focused on driving growth by innovating within its core healthcare segments. A key priority is likely to leverage its specialized focus, gained from the spin-off, to introduce new and improved medical devices and dental products. They are also investing in their health information systems to offer more advanced software solutions that improve efficiency and data management for healthcare providers. The strategy centers on becoming a leader in providing essential healthcare technologies and supplies.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$92.00M
FY2025 Q1
$-80.00M
FY2025 Q2
$59.00M
FY2025 Q3
$-21.00M
FY2025 Q4
$32.00M
FY2026 Q1
$-273.00M
FY2026 Q2
$144.00M
FY2026 Q3
$97.00M
Revenue
$1.95B
Net income
$-12.00M
Diluted EPS
-0.07
Operating cash flow
$177.00M
Free cash flow
$97.00M
Fetching…
Sources
Revenue
$2.21B
Net income
$92.00M
Diluted EPS
0.53
Operating cash flow
$227.00M
Free cash flow
$144.00M
Fetching…
Sources
Revenue
$2.01B
Net income
$13.00M
Diluted EPS
0.07
Operating cash flow
$-189.00M
Free cash flow
$-273.00M
Fetching…
Sources
Revenue
$2.00B
Net income
$63.00M
Diluted EPS
0.37
Operating cash flow
$95.00M
Free cash flow
$32.00M
Fetching…
Sources
Revenue
$2.10B
Net income
$1.27B
Diluted EPS
7.22
Operating cash flow
$76.00M
Free cash flow
$-21.00M
Fetching…
Sources
Revenue
$2.16B
Net income
$90.00M
Diluted EPS
0.51
Operating cash flow
$169.00M
Free cash flow
$59.00M
Fetching…
Sources
Revenue
$2.07B
Net income
$137.00M
Diluted EPS
0.78
Operating cash flow
$29.00M
Free cash flow
$-80.00M
Fetching…
Sources
Revenue
$2.08B
Net income
$31.00M
Diluted EPS
0.18
Operating cash flow
$219.00M
Free cash flow
$92.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $204.91 vs current price $90.08
Wall Street consensus is the average analyst price target: $97.69 (-52.3% lower than our fair-value estimate).
Our most-likely fair value is $204.91 a share — about 127.5% above today's price of $90.08, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $4.8B. Interest coverage 1.8x.
Net debt
$4.84B
Interest coverage
1.82x
Solventum Corporation's profit covers its interest bill about 1.8 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
SOLV
BASELINE
Solventum Corporation
Total debt $5.29B Interest coverage 1.82x This is the baseline the peer rows are being compared against.
Total debt $8.81B Interest coverage 0.61x -66% vs SOLV Carries about 3.0x less debt cushion than SOLV.
Total debt $16.34B Interest coverage 4.87x +167% vs SOLV Carries about 2.7x more debt cushion than SOLV.
Total debt $146.46M Interest coverage 36.48x +1,903% vs SOLV Carries about 20.0x more debt cushion than SOLV.
Total debt $2.80B Interest coverage 6.83x +275% vs SOLV Carries about 3.7x more debt cushion than SOLV.
Total debt $1.59B Interest coverage 6.44x +254% vs SOLV Carries about 3.5x more debt cushion than SOLV.
What you should know
The case for and against SOLV
2 Rewards
2 Risks
Rewards
-
Returns 3.2% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Stock trades 516.1% above its 5-year average P/E.
-
Operating margin compressed from 20.8% to 5.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
101.21x
Forward P/E
12.06x
P/B
3.19x
P/S
1.88x
EV/EBITDA
20.07x
PEG ratio
1.22x
Profitability
How much profit each dollar creates
Gross margin
53.8%
Operating margin
5.5%
Net margin
1.9%
ROE
3.2%
ROA
2.1%
Health
Liquidity and balance-sheet strength
Debt / equity
1.10x
Current ratio
1.03x
Quick ratio
0.52x
Total debt
$5.29B
Total cash
$451.00M
Growth
How the business has been compounding
Revenue TTM
$8.16B
Revenue 5Y CAGR
0.8%
EPS TTM
0.89
EPS 5Y CAGR
4.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$310.00M
Free CF TTM
$-10.00M
FCF margin
-0.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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