Sirona Dental Systems, Inc. - Momentum

Sirona Dental Systems, Inc. (SIRO) recently hit a new all-time high at $51.88 after reporting another strong quarter that beat analyst expectations. With a solid 10% growth projection and discounted P/E, this Zacks #1 rank stock is a beaming momentum pick.

Company Description

Sirona Dental Systems, Inc. together with its subsidiaries, manufactures and sells dental equipment worldwide. The company was founded in 1882 and has a market cap of $2.75 billion.

With earnings season grinding away, we got an update on Sirona’s business on Feb 4 when the company reported excellent Q4 results that came in well ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 10% from last year to $236 million. Earnings were also strong at 96 cents, 19% ahead of the Zacks Consensus Estimate.

The company’s Treatment Centers segment saw the biggest gain, up 13.5% from last year. Sirona also saw solid international gains, with revenue outside the United States up 14% on strong performances in Germany and Asia Pacific.

Margins were also on the up swing, with gross margin climbing to 55.3% from 52.3 last year.

Financial Profile

Sirona’s used the good quarter to strengthen its financial profile, with net debt of falling $16.5 million to $102.5 million after cash and equivalents increased $49 million to $266 million.

Estimates

We saw some decent movement in estimates off the good quarter, with the current year adding 11 cents to $2.88 and the next-year estimate gaining 13 cents to $3.17, a solid 10% growth projection.

Valuation

But in spite of the nice gains, SIRO still has value, trading with a forward P/E of 17X against its peer average of 21X.

2-Year Chart

On the chart, SIRO has been trending higher for most of the last two year, with shares getting an extra boost to a new all-time high on the good quarter. Look for support from the long-term trend on any weakness, take a look below.