Carl Zeiss Meditec AG AFX

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€94.55 +0.60 (0.64%)

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As of May 10, 2024 3:39pm Delayed Price Closed

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Company Report

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Carl Zeiss Earnings: Tough Results as Sales and Margin Slip but Better Second Half Awaits

Keonhee Kim May 8, 2024

Narrow-moat Carl Zeiss reported second-quarter earnings that came in slightly below our expectations. Total sales of EUR 472 million were down 6.4% year over year as inventory destocking and unfavorable foreign-exchange headwinds offset solid demand in Europe, Middle East, and Africa. After updating our full-year assumptions, we maintain our fair value estimate of EUR 82 per share, as our slightly trimmed near-term outlook was immaterial due to time value of money impact.

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Price vs Fair Value

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AFX is trading at a 323% premium.

Price

€94.55

May 10, 2024

Fair Value

€32.00

Feb 9, 2024

Uncertainty

Medium

1-Star Price: €392.50
5-Star Price: €91.70
Economic Moat: Qskwcql
Capital Allocation: Wypqpwqgl

Bulls Say, Bears Say

Bulls

Favorable industrywide trends, such as the aging population, an increasing prevalence of myopia, and a growing access to advanced healthcare across the globe, will act as tailwinds for Zeiss.

Bears

The US represents Zeiss’ second-largest market and the company’s limited portfolio of intraocular lenses and a weak presence in the surgical space in the region is further threatened by its competitors.

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Trading Information

Previous Close Price: €93.95
Day Range: €94.55–96.30
52-Week Range: €72.60–123.75
Bid/Ask: €0.00 / €95.05
Market Cap: €8.46 Bil
Volume/Avg: 127,631 / 130,020

Key Statistics

Price/Earnings (Normalized): 31.00
Price/Sales: 4.09
Dividend Yield (Trailing): 1.16%
Dividend Yield (Forward): 1.16%
Total Yield: 1.17%

Company Profile

Carl Zeiss Meditec is one of the largest medical technology companies in the world and it operates in two segments: Ophthalmic devices and Microsurgery. OPT, which made up 75% of sales in 2022, includes refractive lasers, surgical ophthalmic devices, equipment for ophthalmic diagnostics, as well as a portfolio of intraocular lenses and disposable medical instruments. With a low-teens share of the market, Zeiss is the second-largest player in the space. MCS is composed of implants, surgical instruments, and visualization devices used during neurosurgery, spine surgery, and otolaryngology surgery. With over 60% market share, Zeiss is the clear leader in the microsurgery space.

Sector: Healthcare
Industry: Medical Instruments & Supplies
Stock Style Box: Mid Growth
Total Number of Employees: 4,950
Website: https://www.zeiss.com

Competitors

Johnson & Johnson

JNJ

Valuation

Metric	AFX	JNJ
Price/Earnings (Normalized)	31.00	14.32
Price/Book Value	4.04	5.15
Price/Sales	4.09	4.21
Price/Cash Flow	26.00	16.20

Price/Earnings

AFX

JNJ

Financial Strength

Metric	AFX	JNJ
Quick Ratio	2.34	0.84
Current Ratio	3.51	1.17
Interest Coverage	19.18	23.57

Quick Ratio

AFX

JNJ

Profitability

Metric	AFX	JNJ
Return on Assets (Normalized)	—	12.64%
Return on Equity (Normalized)	—	31.72%
Return on Invested Capital (Normalized)	—	20.11%

Return on Assets

AFX

JNJ

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