Reasons to Add DENTSPLY SIRONA Stock to Your Portfolio Now

DENTSPLY SIRONA XRAY is well-positioned for growth due to its new digital-implant workflowand continued focus on research and development. However, forex headwinds and demand softness in Europe remain a concern.

Shares of this Zacks Rank #2 (Buy) company have lost 16.1% year to date against the industry's 0.1% growth. The S&P 500 Index has gained 6% in the same time frame.

XRAY, with a market capitalization of $3.19 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 7.4% over the next five years.

Factors Favoring XRAY’s Growth

R&D Boosts Product Innovation: DENTSPLY SIRONA’s growth strategy is centered on driving product innovation. Despite facing tough macroeconomic conditions, the company continues to achieve solid internal growth, largely fueled by the launch of cutting-edge products. XRAY remains committed to research and development, with increased investment in 2024 aimed at delivering advanced, customer-focused solutions. In the first quarter of 2025 alone, the company allocated $36 million to R&D, and this momentum is expected to persist throughout the year, supporting its efforts toward more impactful and long-lasting innovation.

New Digital-Implant Workflow in Dentistry: DENTSPLY SIRONA's Azento solution is reshaping digital implant workflows by streamlining planning, purchase and delivery in single-tooth replacements, now also available in Canada and Europe. Backed by its strong X-ray, imaging and digital impression portfolio, the company is well-positioned in the growing $20 billion global tooth-replacement market. Demand is rising for 3D imaging and treatment centers, driven by tech upgrades and supply-chain recovery. DENTSPLY SIRONA’s rapid scale-up in clear aligners further strengthens its digital dentistry ecosystem.

Decent Q1 Results: DENTSPLY SIRONA ended the first quarter of 2025 with better-than-expected results and bottom-line growth. The strength in the Wellspect Healthcare segment in the quarter was encouraging. The expansion of the adjusted operating margin bodes well for the stock.

Adjusted operating profit totaled $72 million, reflecting a 46.9% increase from the prior-year quarter. The adjusted operating margin in the first quarter expanded by 305 basis points to 8.2%.

What’s Weighing on the Stock

Demand Softness in Europe: A softness in demand for CAD/CAM products in Europe, especially in Germany, has led to a decline in sales during 2024. Germany is the second-largest dental market in the world after the United States. The deterioration in demand for capital equipment and overall patient volumes is likely to continue in the next couple of quarters. A continued softness in demand does not bode well for DENTSPLY SIRONA.

XRAY’s Estimate Trend

The Zacks Consensus Estimate for 2025 revenues is pegged at $3.65 billion, indicating a 3.7% decrease from the 2024 level.

The consensus mark for adjusted earnings per share is pinned at $1.90 for 2025, indicating a 13.8% year-over-year improvement.

Other Stocks to Consider

Some other top-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cencora COR. While Phibro Animal Health sports a Zacks Rank #1 (Strong Buy) at present, Boston Scientific and Cencora carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have remained constant at $2.04 in the past 30 days. Shares of the company have surged 75% over the past year, outperforming the industry’s 10.8% growth. Its earnings yield of 7.5% compares comfortably with the industry’s 1% yield. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with an average surprise of 30.6%.

Estimates for Boston Scientific’s 2025 earnings per share have remained constant at $2.91 in the past 90 days. Shares of the company have risen 32.3% over the past year, outperforming the industry’s growth of 10.8%. BSX’s earnings have surpassed estimates in each of the trailing four quarters, with an average surprise of 8.8%. In the last reported quarter, it delivered an earnings surprise of 11.9%.

Cencora shares have rallied 32.8% in the past year. Estimates for the company’s fiscal 2025 earnings per share have increased 0.4% to $15.81 in the past 30 days. COR’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 6%. In the last reported quarter, it posted an earnings surprise of 8.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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