A Look at Dentsply Sirona’s (XRAY) Valuation After Decision to Retain Wellspect Healthcare Subsidiary

DENTSPLY SIRONA (XRAY) is back in the spotlight, and for good reason. The company just wrapped up months of speculation by announcing it will hold on to Wellspect Healthcare, its continence care subsidiary, after weighing all possible options, including a sale. Management claims keeping the business in-house will create more value in the long run, especially after recent investments are said to be paying off. For investors sifting through the news, this isn’t just about corporate reshuffling, but about what it might mean for growth and value prospects ahead. Zooming out, the company’s decision comes during a challenging stretch for the stock. DENTSPLY SIRONA’s share price is down over the past year and momentum hasn’t turned around yet, despite the strategic focus under its new leadership. While the new CEO Dan Scavilla is promising sharper execution and clearer priorities, shares have struggled to find their footing, leaving many investors wondering if there’s a disconnect between progress behind the scenes and what’s being reflected in the market. So, with the dust settled on the Wellspect decision and shares still well below their levels from a year ago, is DENTSPLY SIRONA a value play waiting to be unlocked, or is the market already factoring in all of its future promise?

Most Popular Narrative: 19.2% Undervalued

According to the most widely followed narrative, DENTSPLY SIRONA shares currently trade well below estimated fair value, suggesting an attractive discount for long-term investors.

Strategic investments in innovation and customer relationships are positioning the company to benefit from global dental industry growth and shifting care trends. Active cost reduction programs, operational streamlining, and supply chain optimization are in progress, with management indicating a stronger urgency to go "deeper and faster." This approach could potentially boost EBITDA margin and cash flow generation through both lower SG&A and more efficient manufacturing.

Curious about what’s fueling this bullish fair value? There is a combination of ambitious profitability targets, margin expansion plays, and bold growth assumptions quietly shaping this call. Which numbers are making analysts commit to their forecast? Discover the projections underpinning this 19% upside narrative. The specific financial roadmap may surprise you.

Result: Fair Value of $16.86 (UNDERVALUED)

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

However, persistent sales declines and intensifying competitive pressures could quickly challenge these optimistic projections if execution falters or if market headwinds grow.

Find out about the key risks to this DENTSPLY SIRONA narrative.

Another View: What Does Our DCF Model Say?

Looking at DENTSPLY SIRONA through our DCF model offers a different perspective. This approach also suggests the stock is undervalued, reinforcing the earlier case but raising a critical question: are the underlying assumptions too optimistic, or is the market being overly cautious?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out DENTSPLY SIRONA for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own DENTSPLY SIRONA Narrative

If these narratives do not align with your outlook, or you want to dig into the numbers yourself, you can craft a personalized view in just a few minutes. Do it your way

A great starting point for your DENTSPLY SIRONA research is our analysis highlighting 3 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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