Henry Schein
HSIC
$86.00
+1.16%
Henry Schein Inc. is a healthcare solutions company that distributes medical, dental, and animal health products, equipment, and value-added services to office-based practitioners and alternative care sites worldwide, operating primarily through its Global Distribution and Value-Added Services segment alongside smaller Global Specialty Products and Global Technology units. As one of the largest distributors to fragmented dental and physician practices, the company occupies a scale-driven, relationship-intensive niche in medical distribution, distinct from pure-play device makers or drug wholesalers because it bundles equipment, consumables, software, and practice-financing services into a single channel. The current investor narrative centers on a modest but real top-line reacceleration — first-quarter 2026 revenue grew 6.3% year over year to $3.37 billion — combined with gross-margin expansion to 31.8% from 29.6% a year earlier, which has revived the margin-recovery and operating-leverage thesis after a multi-year stretch of cost inflation and restructuring. Debate now hinges on whether that margin improvement is durable against a leveraged balance sheet (debt-to-equity of 1.14) and soft near-term momentum, with sell-side sentiment split between bulls citing a discounted forward multiple and skeptics flagging decelerating sequential trends and a persistently low-single-digit net margin.…
HSIC
Henry Schein
$86.00
HSIC 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Henry Schein's 12-month outlook, with a consensus price target around $96.87 and implied upside of +12.6% versus the current price.
Average Target
$96.87
0 analysts
Implied Upside
+12.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$64 - $110
Analyst target range
Coverage is solid, with 15 analysts following HSIC and a consensus recommendation of "buy" (mean rating 2.375 on a scale where lower is more bullish). The average target price of $96.87 implies roughly 12.1% upside from the current $86.38, a constructive but not aggressive signal. Consensus forward EPS of $7.07 and revenue of $15.78 billion are broadly in line with the company's recent trajectory, suggesting the Street expects steady rather than spectacular execution.
The target range is wide — $64.00 at the low end to $110.00 at the high end, a spread of 72% around the average — which signals meaningful disagreement about the margin-recovery path. The high target of $110 implies roughly 27% upside and likely assumes sustained gross-margin expansion toward the mid-30s plus operating leverage on mid-single-digit revenue growth; the low target of $64 implies about 26% downside and prices in margin compression, working-capital strain, or a demand slowdown in dental and medical consumables. Recent institutional actions are mixed: BTIG upgraded to Buy from Neutral in June 2026, while Morgan Stanley has maintained an Underweight rating and UBS and Mizuho remain Neutral, indicating the bullish case is not yet consensus. The wide dispersion and split ratings argue for position sizing that respects the binary nature of the margin-recovery thesis.
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Bulls vs Bears: HSIC Investment Factors
The bull case rests on tangible, quantified evidence: gross margin up 220bps year over year, a 14.4x forward PE that is below the stock's own historical band, a 12.1% analyst target upside, and 23.7 points of twelve-month relative outperformance. The bear case is equally concrete: net margin of just 3.18%, net income declining year over year despite 6.31% revenue growth, negative Q1 free cash flow of -$136 million, and 1.14x leverage with only ~4.7x interest coverage. On balance the bull evidence is currently stronger because the margin trend is directional and improving while the cash-flow weakness is seasonal working capital, but the margin of safety is thin. The single most important tension is whether the 220bps gross-margin gain converts into operating leverage — if SG&A holds near 24% of revenue while gross margin stays above 31%, EPS can compound toward the $7.07 consensus; if gross margin reverts toward 29%, the 14.4x forward multiple is not cheap and the stock likely retests the $84 support.
Bullish
- Gross margin expanding 220bps YoY: Q1 2026 gross margin reached 31.77%, up from 29.61% in Q1 2025 and 28.92% in Q4 2025 — a roughly 220bps year-over-year recovery. This is the clearest evidence the margin-recovery thesis is executing, and it is the single variable most responsible for the earnings inflection implied by the 14.4x forward PE.
- Forward PE of 14.4x vs 23.1x trailing: The 38% compression between trailing (23.1x) and forward (14.4x) multiples implies the market expects meaningful EPS growth toward the $7.07 consensus. At 14.4x forward, HSIC trades at a discount to its own 15x–26x historical PE band, offering a valuation cushion if execution holds.
- Analyst target implies 12.1% upside: The $96.87 average target across 15 analysts sits 12.1% above the $86.38 price, with a consensus 'buy' rating (mean 2.375). BTIG's June 2026 upgrade to Buy from Neutral signals the bullish case is gaining incremental sponsorship, even if Morgan Stanley remains Underweight.
- Relative strength: +23.7pts vs S&P over 1Y: HSIC is up 39.26% over twelve months versus 15.53% for the S&P 500, a 23.7 percentage-point outperformance. At $86.38 the stock sits at ~80.6% of its $62.05–$92.18 range, showing durable trend strength without an overextended blow-off signal.
Bearish
- Net margin stuck at 3.18%: Q1 2026 net income of $107 million on $3.368 billion of revenue is a 3.18% net margin, and net income actually fell from $110 million in Q1 2025 despite 6.31% revenue growth. SG&A of $809 million consumes 24% of revenue, so the margin recovery has not yet reached the bottom line.
- Negative quarterly free cash flow: Q1 2026 operating cash flow was -$97 million and FCF -$136 million due to a $278 million working-capital build, a sharp swing from the $338 million FCF generated in Q4 2025. Lumpy cash conversion undermines the quality of the earnings recovery narrative.
- Leverage with thin interest coverage: Debt-to-equity of 1.14 and a current ratio of 1.38 leave a modest cushion, while interest expense of $39 million against $182 million of operating income implies roughly 4.7x coverage. Rising rates or an earnings stumble would pressure a balance sheet already carrying acquisition-related debt.
- Near-term momentum has broken down: The stock is down 0.45% over one month and 1.64% over three months, lagging the S&P 500 by 1.67 and 4.33 points respectively, and has chopped in an $84–$91 band since August. The 7.5 short ratio adds squeeze-or-slip volatility around catalysts.
HSIC Technical Analysis
HSIC is in a sustained uptrend on a trailing twelve-month basis, with the stock up 39.26% over the past year versus a 15.53% gain for the S&P 500 — a relative-strength outperformance of roughly 23.7 percentage points. At $86.38, the shares sit at approximately 80.6% of their 52-week range of $62.05 to $92.18, positioning them in the upper portion of the band but still about 6.3% below the high. That location is characteristic of a stock with positive momentum that has not yet become technically overextended, leaving room to challenge the prior peak without an obvious blow-off signal.
Short-term momentum, however, has decelerated sharply and now diverges from the longer-term trend: the stock is down 0.45% over the past month and 1.64% over three months, against a 9.58% gain over six months and a 12.44% year-to-date advance. Relative strength confirms the fade — HSIC has lagged the S&P 500 by 1.67 points over one month and 4.33 points over three months, even as it leads by 2.10 points over six months. This pattern looks more like a consolidation pause within an uptrend than a trend reversal, but the loss of near-term leadership argues for patience; the stock has chopped sideways in a roughly $84–$91 band since August after peaking near $90.86 in early September.
Key technical levels are well defined: support sits at the 52-week low of $62.05, with a nearer-term floor around the $84 area that has held repeatedly since late September, while resistance is the 52-week high of $92.18. A decisive breakout above $92.18 would confirm the primary uptrend and likely draw momentum buyers, whereas a breakdown below $84 would put the 200-day trend and the $62.05 low in play. Volatility is modest — beta of 0.843 implies roughly 16% less price variability than the market — which supports larger position sizing for a given risk budget, though the 7.5 short ratio and a maximum drawdown of -17.23% over the period remind investors that liquidity and drawdown risk are not negligible.
Beta
0.84
0.84x market volatility
Max Drawdown
-17.2%
Largest decline past year
52-Week Range
$62-$92
Price range past year
Annual Return
+35.4%
Cumulative gain past year
| Period | HSIC Return | S&P 500 |
|---|---|---|
| 1m | -1.6% | -1.2% |
| 3m | +0.6% | +3.4% |
| 6m | +10.9% | +7.0% |
| 1y | +35.4% | +14.4% |
| ytd | +11.9% | +12.0% |
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HSIC Fundamental Analysis
Revenue is growing at a modest but improving pace: first-quarter 2026 sales reached $3.368 billion, up 6.31% year over year from $3.168 billion in Q1 2025, and above the $3.437 billion Q4 2025 and $3.339 billion Q3 2025 prints on a sequential basis when adjusted for seasonality. The multi-quarter trend shows steady low-to-mid-single-digit expansion — quarterly revenue has climbed from $3.136 billion in Q2 2024 to the latest $3.368 billion — with the Healthcare Distribution segment contributing $2.953 billion and Technology adding $221 million. Growth is therefore broad-based but distribution-led, implying the investment case rests on volume leverage and cross-selling rather than a high-growth technology kicker.
Profitability is positive but thin: Q1 2026 net income was $107 million on a 3.18% net margin, with gross margin of 31.77% — up from 29.61% in Q1 2025 and 28.92% in Q4 2025, a clear expansion trend. Operating income of $182 million equates to a 5.40% operating margin, and EBITDA of $256 million (7.60% of revenue) shows the business converts sales into cash earnings at a steady rate. The margin trajectory is the key fundamental swing factor: gross margin has recovered roughly 220 basis points year over year, but SG&A of $809 million still consumes 24% of revenue, so further operating leverage depends on holding the cost line flat while revenue grows.
Balance-sheet health is adequate but leveraged: debt-to-equity stands at 1.14, the current ratio is 1.38, and interest coverage of roughly 4.7x leaves limited cushion if rates or earnings deteriorate. Free cash flow is lumpy — trailing-twelve-month FCF is $431 million, but Q1 2026 operating cash flow was -$97 million and FCF -$136 million due to a $278 million working-capital build, following a strong $338 million FCF quarter in Q4 2025. ROE of 12.27% and ROA of 4.39% are respectable for distribution, and the company continues to return capital via $125 million of buybacks in Q1 2026, but the negative quarterly FCF and 1.14 leverage ratio mean internal cash generation alone may not fully fund growth and shareholder returns without continued debt management.
Quarterly Revenue
$3.4B
2026-03
Revenue YoY Growth
+6.3%
YoY Comparison
Gross Margin
31.8%
Latest Quarter
Free Cash Flow
$431000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HSIC Overvalued?
Because Henry Schein is profitable — Q1 2026 net income of $107 million and trailing EPS of $0.043 on a reported basis, with normalized EPS around $0.93 — the PE ratio is the appropriate primary metric. The stock trades at 23.1x trailing earnings but only 14.4x forward earnings, a 38% compression that implies the market expects meaningful EPS growth, consistent with the consensus estimate of $7.07 for the forward year. The PEG ratio of 3.23, however, suggests that even the forward growth is not cheap relative to its rate of expansion.
Against the medical distribution sector, HSIC screens as a value name on sales but not on earnings: its price-to-sales ratio of 0.70 and EV/sales of 1.10 are low in absolute terms, while its EV/EBITDA of 12.65x and trailing PE of 23.1x are closer to or above typical distributor levels. The forward PE of 14.4x versus a trailing 23.1x implies the market is pricing in an earnings recovery, but the 3.23 PEG and 2.83 price-to-book suggest the discount is not as deep as the headline sales multiple implies. On balance, the valuation looks fair-to-modestly-cheap for a low-margin distributor with mid-single-digit growth, not a compelling bargain.
Historically, HSIC's PE has ranged from roughly 15x to 26x over the past several years, with the current 23.1x trailing multiple sitting in the upper-middle of that band and well above the 19.3x–19.7x levels seen in early and mid-2025. Its price-to-sales ratio of 0.70 is far below the 2.4x–3.5x range recorded from 2021 through 2025, reflecting both the earnings recovery and the stock's re-rating. The current setup — elevated PE but depressed PS — suggests the market is pricing in margin normalization rather than multiple expansion, leaving limited room for further re-rating unless earnings delivery accelerates.
PE
23.1x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 15x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on thin profitability and lumpy cash conversion. Net margin is only 3.18% ($107 million on $3.368 billion), and net income actually declined from $110 million a year earlier despite 6.31% revenue growth, meaning cost inflation is still outrunning volume. Q1 2026 operating cash flow of -$97 million and free cash flow of -$136 million, driven by a $278 million working-capital build, show that a single quarter of inventory or receivables strain can erase the $431 million TTM FCF cushion. Leverage of 1.14x debt-to-equity with $39 million of quarterly interest expense against $182 million of operating income (~4.7x coverage) leaves limited room if margins slip, and revenue concentration in the $2.953 billion Healthcare Distribution segment means the thesis depends on low-margin distribution volume rather than a high-growth technology kicker.
Market and competitive risks are dominated by valuation sensitivity and a split analyst community. At 23.1x trailing earnings the stock sits in the upper-middle of its 15x–26x historical band, so any disappointment compresses the multiple rather than being absorbed by a depressed starting point; the 3.23 PEG and 2.83 price-to-book confirm the stock is not statistically cheap. Beta of 0.843 offers some defensive insulation, but the stock has already lagged the S&P 500 by 4.33 points over three months, and the 72% spread between the $64 low and $110 high analyst targets reflects genuine disagreement — Morgan Stanley remains Underweight while BTIG upgraded in June 2026. Distribution is a scale game against larger competitors and Amazon-style channel disruption, and demand for dental and medical consumables is tied to practice capital-spending cycles that soften in a slower economy.
A worst-case scenario would combine gross-margin reversion toward the 28.9% Q4 2025 level with a working-capital squeeze and a demand slowdown in dental equipment. In that chain, EPS fails to reach the $7.07 consensus, the forward multiple de-rates toward the low end of its historical range, and the stock retests the $84 support that has held since late September before probing the $62.05 52-week low — roughly -28% from $86.38. The analyst low target of $64 implies about -26% downside and effectively prices this outcome. The observed maximum drawdown of -17.23% over the trailing period is a milder guide, but a margin-led de-rating could exceed it, so position sizing should assume a realistic -25% to -28% downside band.