Should You Continue to Hold NVST Stock in Your Portfolio?

Envista Holdings Corp. NVST is benefiting from the strong performance of its Specialty Products & Technologies business, particularly from the Spark manufacturing technology. The company’s global commercial organization expansion positions it for robust future growth due to deeper penetration across more markets. Additionally, it continuously assesses potential buys that either strategically complement its current portfolio or broaden it into new and lucrative economic sectors. Meanwhile, adverse macroeconomic impacts and currency fluctuations raise concerns for Envista’s operations.

In the past year, this Zacks Rank #3 (Hold) stock has lost 18.1% compared with the 0.6% fall of the industry. The S&P 500 composite has risen 5.5% in the same time frame.

The leading optical retailer has a market capitalization of $2.54 billion. The company’s earnings yield of 6.8% is well ahead of the industry’s 0.1% yield. In the last reported quarter, Envista delivered an earnings surprise of 4.4%.

Tailwinds for NVST

Specialty Products & Technologies Business Grows:  Envista’s Specialty Products & Technologies business is gaining momentum on the back of strategic development, manufacturing and marketing of dental implant systems, including re-generative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. The company is particularly gaining from growth within the Spark manufacturing technology. In 2024, Envista launched Spark in six different countries.

During the fourth quarter, the company’s orthodontic business was adversely impacted by a sharp slowdown in the China market. However, Spark continued to perform well. The brackets and wire business grew in the low single digits, with solid growth in both North America and Europe. Additionally, its value implant business witnessed another quarter of strong growth and an improving trend in Nobel in North America. The full arch category experienced strong growth in the quarter.

Focus on International Market Expansion:  Envista supports patient access to high-quality dental care by reaching over 250,000 dental professionals annually through more than 4,000 company-led training and education events. It has established strong relationships globally with key constituencies, including DSOs, dental specialists, general dentists and dental laboratories, through its trusted brands, innovative product offerings and comprehensive customer service. We believe that the continuing expansion of NVST's global commercial organization will provide it with significant opportunities for future growth as it increases its penetration in various geographic markets.

During the fourth quarter, emerging markets, especially Russia, were strong in the consumable business. Within the orthodontic segment, the traditional bracket and wire business saw a solid uptick in Europe. Envista has been serving customers in these markets for a long time. The company feels comfortable continuing its long-term profitable growth in these critical markets.

Strategic Acquisitions to Drive Growth: The company is making efforts to increase shareholder value by using funds to buy or invest in other companies that strategically complement its own business or broaden its product offering into interesting or new adjacent sectors. In 2024, Envista acquired Osteogenics Biomedical — the developer of innovative re-generative solutions for periodontists, oral & maxillofacial surgeons and clinicians involved in implant dentistry throughout the world. Also, DEXIS (currently operating as part of the Envista Equipment and Consumables segment) introduced a number of new offerings, including a new CBCT platform, enhanced software for the DEXIS intraoral scanner and additional surgical functionality in the DTX treatment planning platform.

In February 2025, DEXIS launched the DEXIS Ti2 Sensor — the latest innovation to its digital ecosystem with an all-new dental intraoral sensor. It developed DEXIS Connect Pro — a new proactive service platform for DEXIS CBCT and intraoral sensor devices. Management remains confident that  DEXIS will be a long-term growth driver for Envista.

Factors Weighing on Envista

Poor Macroeconomic Condition: Envista has been grappling with deteriorating international trade, with global inflationary pressure leading to a challenging situation related to raw material and labor costs as well as freight charges and rising interest rates. Additionally, Russia’s invasion of Ukraine and the global response to this invasion, including sanctions imposed by the United States and other countries, could hurt the company’s overall business, adversely impacting Envista’s ability to market and sell products in the affected regions. All these conditions are resulting in a significant escalation in the company’s costs and expenses. During the fourth quarter of 2024, selling, general and administration (SG&A) expenses rose 15.2%. The company’s operating profit plummeted 17.4% year over year.

Foreign Exchange Impacting Sales: Significant portions of Envista's sales and costs are exposed to changes in foreign exchange rates. The company’s operations use multiple foreign currencies, including the euro, British pound, Brazilian real, Australian dollar, Japanese yen, Canadian dollar and Chinese yuan. Changes in those currencies relative to the U.S. dollar will impact its sales, cost of sales and expenses and, consequently, net income.

NVST Stock Estimate Trend

The Zacks Consensus Estimate for Envista’s 2025 earnings per share (EPS) has remained constant at $1 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $2.52 billion. This suggests a 0.3% increase from the year-ago reported number.

Top MedTech Stocks

Some better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Abbott ABT.

Masimo has an earnings yield of 3.5%, well ahead of the industry’s -3.6% yield. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 14.4%. Its shares have risen 1.6% against the industry’s 18% fall in the past year.

MASI sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Scientific, carrying a Zacks Rank #2 (Buy), has an earnings yield of 3.1% compared with the industry’s 0.4%. Shares of the company have rallied 54.8% compared with the industry’s 10.5% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%.

Abbott, carrying a Zacks Rank #2 at present, has an earnings yield of 4.1% compared with the industry’s 0.4%. Shares of the company have rallied 11.5% compared with the industry’s 1.5% growth. ABT’s earnings surpassed estimates in three of the trailing four quarters and matched in one, with the average surprise being 1.6%.

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

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