Is Envista Holdings A Hidden Value Play After Recent Share Price Rebound?

• Wondering if Envista Holdings at around $21.97 is a hidden value play or a value trap? You are not alone, and that is exactly what we are going to unpack here.
• The stock has quietly bounced, up about 8.6% over the last week, 13.2% over the past month, and 15.0% year to date, even though longer-term returns over 3 and 5 years are still down roughly one third.
• Recent headlines have focused on Envista reshaping its portfolio through strategic moves in dental technology and equipment, as management leans into higher value, innovation-driven segments of the market. That shift helps explain why sentiment has started to thaw after a tough few years, with investors willing to reconsider the risk-reward profile.
• On our framework Envista scores a 4/6 valuation check, suggesting the market may still be missing some of the upside. In the next sections we will compare the usual valuation methods before finishing with a more powerful way to judge what the stock is really worth.

Envista Holdings delivered 12.8% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: Envista Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in $ terms. For Envista Holdings, the 2 Stage Free Cash Flow to Equity model starts from last twelve months Free Cash Flow of about $253.1 million, then uses analyst forecasts for the next few years and extrapolates further growth beyond that.

Under this framework, Envista’s Free Cash Flow is expected to remain in the mid $200 million range, with projections reaching roughly $258.3 million by 2035 based on a mix of analyst estimates and Simply Wall St growth assumptions. When all those future cash flows are discounted back, the model arrives at an intrinsic value of about $23.22 per share.

Compared with the current share price around $21.97, the DCF suggests Envista is trading at roughly a 5.4% discount to its estimated fair value. This implies the stock is only modestly undervalued at present.

Result: ABOUT RIGHT

Envista Holdings is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Envista Holdings.

Approach 2: Envista Holdings Price vs Sales

For companies like Envista that are in a scale driven, equipment and consumables heavy industry, the Price to Sales ratio is a useful way to judge valuation because it focuses on how much investors are paying for each dollar of revenue, regardless of short term earnings noise. In general, higher growth and lower perceived risk justify a higher sales multiple, while slower growth or higher uncertainty should command a lower, more conservative ratio.

Envista currently trades on a Price to Sales ratio of about 1.38x. That sits below the broader Medical Equipment industry average of roughly 3.46x and also below the 1.60x peer group average, suggesting the stock is priced more cautiously than many competitors. Simply Wall St’s Fair Ratio framework, which estimates what a “normal” multiple should be after adjusting for Envista’s growth outlook, margins, industry, size and risk profile, points to a fair Price to Sales ratio of around 1.80x. This firm specific Fair Ratio is more informative than a simple peer or industry comparison because it tailors expectations to Envista’s own fundamentals.

With the actual 1.38x multiple sitting well below the 1.80x Fair Ratio, the shares screen as undervalued on this metric.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Envista Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Envista’s story with concrete numbers like future revenue, earnings, margins, and ultimately a fair value estimate.

A Narrative on Simply Wall St is your investment storyline for a company, where you spell out what you think will drive the business, translate that into a financial forecast, and then see what share price those assumptions justify.

This turns valuation into a clear chain, from business story, to forecast, to fair value. It also makes it easier to decide whether Envista looks attractive by comparing your Fair Value to today’s Price to see if it is a buy, hold, or sell.

Narratives are available to everyone on Simply Wall St’s Community page, used by millions of investors, and they update dynamically when new information, like earnings results or news about dental demand or Chinese procurement reforms, changes the outlook.

For Envista, one investor might build a bullish Narrative with stronger emerging market growth, rising margins, and a fair value around $25 per share. A more cautious investor, focusing on pricing pressure and execution risks, might see fair value closer to $17 and act very differently on the same stock price.

Do you think there's more to the story for Envista Holdings? Head over to our Community to see what others are saying!

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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