Should You Add NVST Stock to Your Portfolio Right Now?

Envista Holdings Corp.’s NVST 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, a strong solvency bodes well. Yet, currency fluctuations raise concerns for Envista’s operations.

In the past year, this Zacks Rank #2 (Buy) stock has gained 9.4%, outpacing the industry’s and S&P 500 composite growth of 8.4% and 9.2%, respectively, in the same time frame.

The leading optical retailer has a market capitalization of $3.12 billion. The company’s earnings yield of 5.4% is well ahead of the industry’s 0.5%. In the last reported quarter, Envista delivered an earnings surprise of 20%.

Tailwinds for NVST

Focus on International Market Expansion: Outside the United States, Envista has principal markets in Europe, Asia, the Middle East and Latin America. The company continues to expand clinical training and education infrastructure to enhance patient access to high-quality dental care, reaching over 250,000 dental professionals annually. Through its trusted brands, innovative product offerings, and comprehensive customer service, it has established strong relationship globally with key constituencies, including DSOs, dental specialists, general dentists and dental laboratories. 

We believe that this increasing penetration across geographies positions Envista well for substantial future growth. In the first quarter of 2025, the company delivered good performance across most geographies, positive growth in North America, Japan and emerging markets, excluding China, and flat growth in Europe.

Strategic Acquisitions to Drive Growth: Envista's growth strategy includes future acquisitions, for which it continuously assesses potential buys that either strategically complement its current portfolio or broaden it into new and lucrative economic sectors.

In 2024, Envista acquired Osteogenics Biomedical — the developer of innovative regenerative solutions for periodontists, oral & maxillofacial surgeons and clinicians involved in implant dentistry throughout the world.  In 2022, the company acquired Carestream Dental's Intraoral Scanner business, now operating as DEXIS under its Envista Equipment and Consumables segment.

Favorable Solvency: At the end of the first quarter of 2025, the company had cash and cash equivalents of $1.08 billion, while current debt was only $116 million. Such underlying financial strength gives Envista strong flexibility amid the ongoing macroeconomic uncertainty. Long-term debt totaled $1.30 billion compared with $1.30 billion at the end of the fourth quarter of 2024. The debt-to-capital ratio dropped 0.5% sequentially to 31.7% in the first quarter.

Headwinds for NVST

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. Changes in those currencies relative to the U.S. dollar will impact its sales, cost of sales and expenses, and consequently, net income.  In the first quarter of 2025, currency fluctuations negatively impacted sales by nearly 140 bps year over year.

NVST Stock Estimate Trend

The Zacks Consensus Estimate for Envista’s 2025 earnings per share (EPS) has moved 3% north to $1.03 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $2.55 billion, suggesting a 1.5% increase from the year-ago reported number.

Other Top MedTech Stocks

Some other top-ranked stocks in the broader medical space are Align Technology ALGN, Hims & Hers Health HIMS and Cencora COR. 

Align Technology has an estimated long-term earnings growth rate of 11.2% compared with the industry’s 9.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.4%. Its shares have lost 27.7% compared with the industry’s 3.3% decline in the past year.

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

Hims & Hers Health, currently carrying a Zacks Rank #2, has an earnings yield of 1.3% against the industry’s -10.1%. Shares of the company have surged 129.7% compared with the industry’s 35.9% gain. HIMS’ earnings surpassed estimates in two of the trailing four quarters, matched on one occasion and missed on another, the average surprise being 2.8%.

Cencora, carrying a Zacks Rank #2 at present, has an earnings yield of 5.4% compared with the industry’s 3.8%. Shares of the company have rallied 25.9% against the industry’s 14.4% decline. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%.

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

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