Cloud Software Updates And Digital Platform Will Advance Dentistry Trends

Key Takeaways

• Digital platform expansion, product innovation, and AI integration support increased demand for digital dentistry and enhance recurring revenues and margins.
  
• Operational efficiencies, global market diversification, and customer-centric strategies boost cost controls, resilience, and drive sustained growth in revenue and profitability.
  
• Ongoing trade risks, weak demand, execution challenges, pricing pressures, and unresolved legal issues threaten margins, revenue growth, and overall market confidence.

Catalysts

Develops, manufactures, and markets dental equipment supported by cloud-enabled solutions, dental products, and healthcare consumable products in urology and enterology worldwide.

• Expanding adoption and added functionalities of the DS Core digital platform, improvements in Primescan 2, and accelerating cloud-based software updates position Dentsply Sirona to capitalize on increased dentist demand for digital workflows and integrated technology, potentially driving higher recurring revenues and margin expansion as digital dentistry penetration grows.
  
• The company’s sustained investment in product innovation, rapid regulatory clearances (multiple 510(k)s filed and received), and AI-powered solutions supports alignment with increasing patient preference for efficient, aesthetic, and preventive dental care, which can lift procedure volumes and top-line growth.
  
• Ongoing execution of operational efficiency initiatives—including ERP rollouts, supply chain and SKU optimization, and manufacturing site consolidation—are enhancing cost controls, supporting margin improvement and contributing to sustained EBITDA growth.
  
• Strategic expansion and growth in Europe and Rest of World, particularly in markets like Germany and China, help diversify revenue streams and reduce reliance on any single geography, providing resilience and potential revenue upside as emerging markets’ dental demand rises.
  
• The company’s shift to a more customer-centric approach, including the ramp-up of virtual sales teams, improved e-commerce, and data-driven customer engagement, is likely to improve commercial execution and drive better sales conversion, supporting both revenue growth and net margin improvement over time.

DENTSPLY SIRONA Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming DENTSPLY SIRONA's revenue will grow by 1.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from -24.4% today to 6.9% in 3 years time.
• Analysts expect earnings to reach $266.0 million (and earnings per share of $1.09) by about May 2028, up from $-908.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.5x on those 2028 earnings, up from -3.7x today. This future PE is lower than the current PE for the US Medical Equipment industry at 33.4x.
• Analysts expect the number of shares outstanding to decline by 1.69% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.55%, as per the Simply Wall St company report.

DENTSPLY SIRONA Future Earnings Per Share Growth

Risks

• Heightened global tariff risks and trade policy uncertainty pose significant headwinds, especially given that about half of U.S. sales rely on goods manufactured outside the U.S.; ongoing and new tariffs could add $50 million or more in annualized costs, potentially compressing net margins and slowing earnings growth.
  
• Sluggish organic sales growth (down 4.4% in Q1, with some segments like Orthodontic and Implant Solutions declining almost 18%) reflects ongoing weak demand in key segments and difficulties in product adoption, which may result in sustained revenue pressure if trends persist.
  
• Potential for further pricing pressure and reimbursement compression, as highlighted by customer concerns about passing on tariff-driven price increases and the need for customers to remain cost conscious in light of dental procedure reimbursement rates—adding risk to top-line growth and operating margins.
  
• Execution risk remains high in critical turnaround areas—such as U.S. implants and orthodontics—where performance continues to disappoint, and where commercial team re-builds, technology refreshes, and improved software adoption remain unproven, risking further loss of market share and revenue stagnation.
  
• Unresolved legal, tax, and governance issues—including the protracted German tax investigation and recent interim CFO turnover—suggest ongoing risks of elevated SG&A/legal expenses, unpredictable settlements, and management distraction, all of which could negatively impact net earnings and investor confidence.

Valuation

• The analysts have a consensus price target of $18.143 for DENTSPLY SIRONA based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $25.0, and the most bearish reporting a price target of just $14.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.9 billion, earnings will come to $266.0 million, and it would be trading on a PE ratio of 16.5x, assuming you use a discount rate of 8.5%.
  
• Given the current share price of $16.63, the analyst price target of $18.14 is 8.3% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.