CONMED Corp (NYSE: CNMD)

Sector: Healthcare Industry: Medical Devices CIK: 0000816956
Market Cap 1.32 Bn
P/B 1.28
P/E 27.99
P/S 0.96
ROIC (Qtr) 3.14
Div Yield % 1.41
Rev 1y % (Qtr) 7.88
Total Debt (Qtr) 834.94 Mn
Debt/Equity (Qtr) 0.81
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About

CONMED Corporation (CNMD), a prominent player in the medical technology industry, specializes in providing devices and equipment for surgical procedures. Established in 1970 and reincorporated as a Delaware corporation in May 2020, CONMED's products cater to various medical specialties, including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. CONMED's primary business activities revolve around the design, manufacture, and distribution of surgical devices and equipment. The company operates in numerous countries,...

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Investment thesis

Bull case

  • Healthy cash reserves of 40.82M provide 57.33x coverage of short-term debt 712000, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 150.88M exceeds capital expenditure of 19.81M by 7.62x, indicating strong organic growth funding capability.
  • Operating cash flow of 170.69M fully covers other non-current liabilities 143.38M by 1.19x, showing strong long-term stability.
  • Tangible assets of 936.69M provide robust 4.24x coverage of other current liabilities 220.68M, indicating strong asset backing.
  • Operating cash flow of 170.69M provides strong 408.35x coverage of operating expenses 418000, showing operational efficiency.

Bear case

  • Operating cash flow of 170.69M barely covers its investment activities of (20.96M), with a coverage ratio of -8.15, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 40.82M against inventory of 355.54M, the 0.11 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 170.69M provides thin coverage of dividend payments of (24.75M) with a -6.90 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (20.96M) provide weak support for R&D spending of 55.88M, which is -0.37x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of 150.88M represents just -2.02x of debt issuance (74.59M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product Lines Breakdown of Revenue (2017)

Geographical Breakdown of Revenue (2017)

Peer comparison

Companies in the Medical Devices
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ABT Abbott Laboratories 173.80 Bn 32.73 5.47 12.94 Bn
2 SYK Stryker Corp 141.15 Bn 43.48 5.62 15.86 Bn
3 MDT Medtronic plc 123.47 Bn 25.92 3.55 29.10 Bn
4 BSX Boston Scientific Corp 112.80 Bn 38.92 5.62 11.44 Bn
5 EW Edwards Lifesciences Corp 45.66 Bn 33.38 7.76 0.70 Bn
6 DXCM Dexcom Inc 27.52 Bn 32.91 5.90 1.34 Bn
7 STE STERIS plc 24.13 Bn 34.08 4.14 2.05 Bn
8 PODD Insulet Corp 17.33 Bn 70.38 6.87 1.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.92 2.13
EV to Cash from Ops. EV/CFO 12.49 2.75
EV to Debt EV to Debt 2.55 17.25
EV to EBIT EV/EBIT 20.86 2.89
EV to EBITDA EV/EBITDA 17.86 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 14.13 29.36
EV to Market Cap EV to Market Cap 1.62 25.09
EV to Revenue EV/Rev 1.55 32.80
Price to Book Value [P/B] P/B 1.28 4.73
Price to Earnings [P/E] P/E 27.99 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.90 40.22
Dividend Payout Ratio % Div Payout % (Qtr) 39.50 1.59
Dividend per Basic Share Div per Share (Qtr) 0.60 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 12.32 -0.37
Interest Coverage Int. cover (Qtr) 3.29 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -51.38 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 66.88 8,476.58
Dividend Growth (1y) % Div 1y % (Qtr) -25.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -58.44 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -44.98 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) -48.98 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) -56.38 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) -64.57 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) -1.95 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.38 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.59 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.02
Cash Ratio Cash Ratio (Qtr) 0.13 1.80
Current Ratio Curr Ratio (Qtr) 2.14 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.81 1.20
Interest Cover Ratio Int Coverage (Qtr) 3.29 196.93
Times Interest Earned Times Interest Earned (Qtr) 3.29 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.70 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) 7.43 -2,478.60
EBT Margin % EBT Margin % (Qtr) 5.17 -2,690.42
Gross Margin % Gross Margin % (Qtr) 54.60 30.80
Net Profit Margin % Net Margin % (Qtr) 3.40 -2,821.53