GE HealthCare Technologies Inc. (NASDAQ: GEHC)

Sector: Healthcare Industry: Health Information Services CIK: 0001932393
Market Cap 38.75 Bn
P/B 2.28
P/E 19.85
P/S 2.19
ROIC (Qtr) 9.69
Div Yield % 0.04
Rev 1y % (Qtr) 5.76
Total Debt (Qtr) 10.28 Bn
Debt/Equity (Qtr) 1.03

About

GE HealthCare Technologies Inc. (GEHC), a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator, operates in the healthcare sector. The company is dedicated to its mission of creating a world where healthcare has no limits, with approximately 51,000 colleagues working towards this goal. GE HealthCare is at the forefront of the healthcare ecosystem, enabling precision care by increasing health system capacity, enhancing productivity, digitizing healthcare delivery, and improving clinical outcomes. The company's...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 4.03B provide 2.01x coverage of short-term debt 2B, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 1.85B provides exceptional 25.34x coverage of minority interest expenses 73M, showing strong core operations.
  • Operating cash flow of 1.85B provides strong 14.57x coverage of stock compensation 127M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.40B exceeds capital expenditure of 450M by 3.11x, indicating strong organic growth funding capability.
  • Tangible assets of 21.52B provide exceptional 10.75x coverage of deferred revenue 2B, showing strong service capability backing.

Bear case

  • Operating cash flow of 1.85B barely covers its investment activities of (1.02B), with a coverage ratio of -1.82, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.02B) provide weak support for R&D spending of 1.28B, which is -0.79x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 1.85B provides thin coverage of dividend payments of (62M) with a -29.84 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 4.03B provide limited coverage of acquisition spending of (333M), which is -12.09x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 1.85B provides insufficient coverage of deferred revenue obligations of 2B, which is 0.92x, raising concerns about future service delivery capabilities.

Segments Breakdown of Revenue (2024)

Subsegments Breakdown of Revenue (2024)

Peer comparison

Companies in the Health Information Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TEM Tempus AI, Inc. 45.63 Bn -223.83 41.29 1.34 Bn
2 GEHC GE HealthCare Technologies Inc. 38.75 Bn 19.85 2.19 10.28 Bn
3 VEEV Veeva Systems Inc 37.30 Bn 43.36 12.11 0.09 Bn
4 DOCS Doximity, Inc. 7.81 Bn 30.87 12.57 0.01 Bn
5 BTSG BrightSpring Health Services, Inc. 7.70 Bn 59.42 0.62 2.70 Bn
6 HQY Healthequity, Inc. 7.32 Bn 38.14 5.67 1.03 Bn
7 WAY Waystar Holding Corp. 5.00 Bn 44.97 4.81 1.25 Bn
8 PRVA Privia Health Group, Inc. 2.79 Bn 153.67 1.37 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.25 2.77
EV to Cash from Ops. EV/CFO 44.55 -10.86
EV to Debt EV to Debt 4.40 161.93
EV to EBIT EV/EBIT 17.36 -106.48
EV to EBITDA EV/EBITDA 14.40 4.22
EV to Free Cash Flow [EV/FCF] EV/FCF 62.00 7.46
EV to Market Cap EV to Market Cap 1.17 -14.93
EV to Revenue EV/Rev 2.55 1.76
Price to Book Value [P/B] P/B 2.28 10.57
Price to Earnings [P/E] P/E 19.85 147.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 35.76 -8.65
Dividend Payout Ratio % Div Payout % (Qtr) 2.90 5.00
Dividend per Basic Share Div per Share (Qtr) 0.15 0.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 4.72 4.57
Interest Coverage Int. cover (Qtr) 6.95 -584.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -14.50 -24.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 12.86 172.48
Dividend Growth (1y) % Div 1y % (Qtr) 20.83 -1.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 26.38 -17.73
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.82 39.85
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.32 -38.83
EBT Growth (1y) % EBT 1y % (Qtr) 17.63 -4.52
EPS Growth (1y) % EPS 1y % (Qtr) 31.79 2.60
FCF Growth (1y) % FCF 1y % (Qtr) -17.40 -48.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.18 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.56 0.66
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.03
Cash Ratio Cash Ratio (Qtr) 0.40 1.87
Current Ratio Curr Ratio (Qtr) 1.18 3.27
Debt to Equity Ratio Debt/Equity (Qtr) 1.03 -0.43
Interest Cover Ratio Int Coverage (Qtr) 6.95 -584.72
Times Interest Earned Times Interest Earned (Qtr) 6.95 -584.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.50 -435.80
EBIT Margin % EBIT Margin % (Qtr) 15.63 -464.70
EBT Margin % EBT Margin % (Qtr) 13.38 -461.74
Gross Margin % Gross Margin % (Qtr) 40.80 44.03
Net Profit Margin % Net Margin % (Qtr) 11.00 -468.01