Analysts Weigh Mixed Outlook for DENTSPLY SIRONA as Valuation and Guidance Adjusted

Key Takeaways

• Expanded digital dentistry platforms and recurring revenue focus aim to raise margins, while streamlined operations target improved efficiency and cash flow.
  
• Strategic investments in innovation and customer relationships are positioning the company to benefit from global dental industry growth and shifting care trends.
  
• Persistent sales decline, cost inflation, competitive pressures, misaligned investments, and strategic execution risks collectively threaten long-term profitability and market share retention.

Catalysts

Develops, manufactures, and markets dental equipment supported by cloud-enabled solutions, dental products, and healthcare consumable products in urology and enterology worldwide.

• DENTSPLY SIRONA is leveraging the increasing global demand for advanced dental care-driven by an aging population and rising middle class in emerging markets-by ramping up investments in product innovation and tailored field support, which is expected to accelerate international revenue growth over the long term.
  
• The company's continued expansion of digital dentistry platforms (such as DS Core) and emphasis on integrated software/hardware solutions aim to capture higher-margin recurring revenues as dental practices adopt digital workflows, supporting sustainable improvements in net margins and earnings.
  
• Active cost reduction programs, operational streamlining, and supply chain optimization are in progress, with management indicating a stronger urgency to go "deeper and faster," potentially boosting EBITDA margin and cash flow generation through both lower SG&A and more efficient manufacturing.
  
• Management's focus on closer customer relationships, clinician workflow enhancements, and proceduralization is expected to drive sales force effectiveness and bolster share in aesthetic and restorative segments-areas benefiting from heightened health awareness and the global trend toward elective and preventive dental procedures.
  
• Disciplined capital allocation toward innovation, organic growth, and financial flexibility, along with new leadership focused on execution, positions DENTSPLY SIRONA to capitalize on long-term industry consolidation and the shift toward value-based, high-quality dental care, which should support multi-year top-line and bottom-line growth.

DENTSPLY SIRONA Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming DENTSPLY SIRONA's revenue will grow by 2.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from -25.9% today to 12.8% in 3 years time.
• Analysts expect earnings to reach $502.2 million (and earnings per share of $1.15) by about September 2028, up from $-949.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.9x on those 2028 earnings, up from -2.9x today. This future PE is lower than the current PE for the US Medical Equipment industry at 28.6x.
• Analysts expect the number of shares outstanding to grow by 0.35% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.51%, as per the Simply Wall St company report.

DENTSPLY SIRONA Future Earnings Per Share Growth

Risks

• Persistent top-line challenges were evident, with global sales declining by nearly 5% year-over-year and continued U.S. sales weakness (down 11% ex-Byte), indicating DENTSPLY SIRONA is struggling to reignite sustainable revenue growth, especially in major geographies-an ongoing trend that could threaten long-term revenue and earnings outlook.
  
• The company faces significant cost headwinds from tariffs, with the annualized impact escalating from $50 million to $80 million, only partially offset for 2025 and suggesting greater margin compression by 2026 if cost pass-through and mitigation measures falter-thus pressuring both gross and EBITDA margins over the long term.
  
• Management repeatedly cited ongoing "softness" in high-margin elective categories (implants, CAD/CAM, imaging, U.S. orthodontics) and highlighted a double-digit decline in value implants, driven by both operational bottlenecks (e.g., Middle East disruptions) and increased competitive intensity; this reflects structural risks to both revenue growth and market share, especially as lower-cost competitors expand.
  
• Recent impairment charges of $214 million related to goodwill and intangibles in the OIS and CTS segments underscore the misalignment of prior investment assumptions with current market realities, raising concerns about future returns on innovation investment, capital allocation discipline, and the risk of additional write-downs that could negatively affect reported earnings and investor confidence.
  
• Management transitions and frequent references to needing more time for "listen-and-learn" sessions highlight strategic execution risk, especially amid an innovation-heavy and highly competitive landscape; ongoing integration and operational streamlining efforts may struggle to deliver expected efficiencies and could drive higher SG&A costs, hampering net margin expansion if not executed decisively and rapidly.

Valuation

• The analysts have a consensus price target of $16.857 for DENTSPLY SIRONA based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $24.0, and the most bearish reporting a price target of just $14.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.9 billion, earnings will come to $502.2 million, and it would be trading on a PE ratio of 8.9x, assuming you use a discount rate of 9.5%.
• Given the current share price of $13.91, the analyst price target of $16.86 is 17.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.