Carl Zeiss Meditec (XTRA:AFX) Valuation After Strong FY 2024/25 Revenue Outlook and Margin Improvement Guidance

Carl Zeiss Meditec (XTRA:AFX) has investors’ attention after reporting solid revenue growth for fiscal 2024/25, helped by its Ophthalmology segment and the consolidation of DORC, alongside a constructive outlook for margins.

See our latest analysis for Carl Zeiss Meditec.

Despite the upbeat revenue and margin outlook, the stock’s 1 year total shareholder return of minus 16.9 percent and 3 year total shareholder return of roughly minus 64.4 percent show that sentiment has been weak. However, the recent 1 day share price return of 1.45 percent hints that momentum might be starting to stabilize.

If this update has you reassessing opportunities in medical technology, it is also worth exploring other potential ideas across healthcare stocks to see how peers stack up on growth, quality, and valuation.

With the share price still well below past highs and trading at a sizable discount to analyst targets, is Carl Zeiss Meditec quietly undervalued, or are markets already correctly pricing in its next leg of growth?

Most Popular Narrative: 24.3% Undervalued

Based on the most widely followed narrative, Carl Zeiss Meditec’s fair value of €53.61 sits comfortably above the last close at €40.58, pointing to meaningful upside if the growth path pans out as expected.

The ongoing shift towards more premium IOLs (Intraocular Lenses) and increased volume sales despite price pressures due to volume-based procurement in China presents an opportunity for higher future net margins.

Continued consolidation and integration of DORC are driving revenue growth, particularly in the U.S., and expanding recurring revenue streams, positively impacting earnings.

Read the complete narrative.

Want to see how steady mid single digit revenue growth, rising profit margins, and a punchy future earnings multiple all combine into that valuation target? The full narrative unpacks the exact margin lift, earnings step up, and discount rate baked into this fair value story, plus how much multiple compression it still assumes from today’s pricing power expectations.

Result: Fair Value of €53.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer organic sales and margin pressure from weaker high margin mix, particularly in China, could easily derail this upbeat recovery path.

Find out about the key risks to this Carl Zeiss Meditec narrative.

Build Your Own Carl Zeiss Meditec Narrative

If you see the story differently, or would rather dig into the numbers yourself, you can build a tailored view in just a few minutes: Do it your way

A great starting point for your Carl Zeiss Meditec research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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