Sirona (SIRO) analysts have raised estimates to the highest level in years, keeping the valuations attractive.
Company Description
Sirona makes a variety of dental products sold worldwide. The company’s offerings range from basic instruments to imaging and computer systems.
Revenue Jumps
Sirona reported second-quarter results on May 5 that showed a 15% increase in revenue, to $190 million. Gross profit margin improved to 52.2%, from 48.7%.
Improvement in those 2 areas led to net income of $17.5 million, up from $0.6 million one year ago. Earnings broke down to 63 cents per share, topping the Zacks Consensus Estimate by 16 cents.
The quarter marked Sirona’a fifth consecutive earnings surprise, the seventh in the past 2 years.
Raising Guidance
In the same press release, Sirona’s management decided to raise the full-year forecast due to the strong results. Analysts quickly followed suit.
The consensus for the current fiscal year is up to $2.45, from $2.29 on 11 upward revisions. Next year analysts are expecting $2.64, up 12 cents on 11 revisions.
If Sirona, a Zacks #1 Rank (Strong Buy), can hit these targets the year-over-year growth rates will be 19% and 8%, respectively.
Decent Value Too
Currently Sirona is trading at 14.5 times forward earnings and has a PEG ratio of 1.0, meaning the growth is fairly priced.
Defensive
Given the recent turmoil in the stock market, due to global issues, many investors are shifting to defensive sectors. Healthcare is one of the most common places to seek refuge.
The Chart
If you are able to look past the short-term noise you will see that Sirona’s estimates have soared to the highest levels in over 5 years.
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