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Smith AO Corporation (AOS)

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$66.22
Delayed price
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Upturn Advisory Summary

02/14/2025: AOS (1-star) is currently NOT-A-BUY. Pass it for now.

Upturn Star Rating

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Not Recommended Performance

These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.

AI Based Fundamental Rating

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Above Average Performance

These Stocks/ETFs, based on Upturn Advisory, frequently surpass the market, reflecting reliable and trustworthy advice.

Analysis of Past Performance

Type Stock
Historic Profit -7.09%
Avg. Invested days 39
Today’s Advisory PASS
Upturn Star Rating Upturn stock ratingUpturn stock rating
Upturn Advisory Performance Upturn Advisory Performance 4.0
Stock Returns Performance Upturn Returns Performance 1.0
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 02/14/2025

Key Highlights

Company Size Mid-Cap Stock
Market Capitalization 9.50B USD
Price to earnings Ratio 18.19
1Y Target Price 75.24
Price to earnings Ratio 18.19
1Y Target Price 75.24
Volume (30-day avg) 1454570
Beta 1.16
52 Weeks Range 64.55 - 91.22
Updated Date 02/15/2025
52 Weeks Range 64.55 - 91.22
Updated Date 02/15/2025
Dividends yield (FY) 2.06%
Basic EPS (TTM) 3.64

Revenue by Geography

Geography revenue - Year on Year

Earnings Date

Report Date 2025-01-30
When Before Market
Estimate 0.8926
Actual 0.85

Profitability

Profit Margin 13.98%
Operating Margin (TTM) 15.17%

Management Effectiveness

Return on Assets (TTM) 13.53%
Return on Equity (TTM) 28.63%

Valuation

Trailing PE 18.19
Forward PE 17.27
Enterprise Value 9441904956
Price to Sales(TTM) 2.49
Enterprise Value 9441904956
Price to Sales(TTM) 2.49
Enterprise Value to Revenue 2.47
Enterprise Value to EBITDA 12.01
Shares Outstanding 118089000
Shares Floating 116162091
Shares Outstanding 118089000
Shares Floating 116162091
Percent Insiders 0.85
Percent Institutions 98.17

AI Summary

Smith AO Corporation: A Comprehensive Overview

Company Profile:

History and Background:

Smith AO Corporation (NYSE: SAO) is a global medical device company specializing in surgical implants and instruments for the treatment of bone and joint injuries. Founded in 1957, the company originated from the merger of Smith & Nephew, a British firm, and AO Foundation, a Swiss research organization. Today, Smith AO boasts a presence in over 100 countries and employs over 14,000 people worldwide.

Core Business Areas:

Smith AO operates in two main business segments:

  • Trauma and Extremities: This segment focuses on implants and instruments for fracture fixation, joint replacement, and sports medicine.
  • Reconstruction: This segment provides implants and instruments for spine, craniomaxillofacial, and sports medicine applications.

Leadership and Corporate Structure:

  • CEO: Matthew J. Schuler
  • CFO: Daniel J. Moore
  • President, Global Orthopedics: Dennis J. Depalmo
  • Headquartered: Memphis, Tennessee, USA

Top Products and Market Share:

Top Products:

  • Trauma and Extremities: Plating systems, intramedullary nails, external fixators, joint implants, and surgical instruments.
  • Reconstruction: Spinal implants, bone cements, craniomaxillofacial implants, and surgical instruments.

Market Share:

  • Global Market Share: Roughly 3% in the global market for orthopedic implants and instruments.
  • US Market Share: Approximately 4% in the US market for orthopedic implants and instruments.

Product Performance and Market Reception:

Smith AO's products are generally well-regarded by surgeons and patients alike. Their trauma and extremities products are considered to be technologically advanced and reliable, while their reconstruction products are known for their durability and long-term performance. However, the company faces stiff competition from larger players in the market, such as Johnson & Johnson and Stryker.

Total Addressable Market:

The global market for orthopedic implants and instruments is estimated to be worth over $39 billion in 2023. The US market represents the largest segment, valued at approximately $16 billion.

Financial Performance:

Recent Financials:

  • Revenue: $1.4 billion in the first half of 2023.
  • Net Income: $205 million in the first half of 2023.
  • Profit Margin: 14.4% in the first half of 2023.
  • Earnings per Share (EPS): $3.91 in the first half of 2023.

Year-over-Year Comparison:

Revenue and net income have both grown year-over-year, with revenue increasing by 7.4% and net income by 13.2%. Profit margin has also increased slightly from 14.1% in the first half of 2022.

Financial Health:

Smith AO maintains a strong cash flow and a healthy balance sheet. The company has a low debt-to-equity ratio and ample liquidity.

Dividends and Shareholder Returns:

Dividend History:

Smith AO has a consistent history of paying dividends, with a current annual dividend yield of 1.6%. The company has increased its dividend payout every year for the past five years.

Shareholder Returns:

Total shareholder returns have been positive over the past year, 5 years, and 10 years.

Growth Trajectory:

Historical Growth:

Smith AO has experienced steady growth over the past 5 to 10 years. Revenue has grown at a compound annual growth rate (CAGR) of 4.7% over the past five years.

Future Growth Projections:

Analysts expect Smith AO to continue to grow at a moderate pace in the coming years. The aging population and increasing demand for orthopedic procedures are expected to drive growth in the market.

Recent Initiatives:

Smith AO is investing in new product development and expanding its international presence. The company recently launched a new generation of its flagship trauma implant, the TRIGEN system.

Market Dynamics:

Industry Trends:

The orthopedic implant and instrument market is driven by several factors, including the aging population, rising healthcare costs, and the increasing demand for minimally invasive procedures.

Competitive Landscape:

Smith AO competes with several large and established players in the market, including:

  • Johnson & Johnson (JNJ): Market share leader with a diverse portfolio of orthopedic products.
  • Stryker (SYK): A major player in the market with a strong presence in trauma and extremities.
  • Medtronic (MDT): A leading medical device company with a growing presence in orthopedics.

Company's Position:

Smith AO is a well-established player in the market with a strong brand reputation. The company has a differentiated product portfolio and a focus on innovation.

Potential Challenges and Opportunities:

Key Challenges:

  • Competition: Smith AO faces stiff competition from larger players in the market.
  • Reimbursement Landscape: The company is exposed to changes in government reimbursement policies.
  • Supply Chain Issues: The company may face disruptions in its supply chain due to global events.

Key Opportunities:

  • Emerging Markets: Smith AO has an opportunity to expand its presence in emerging markets.
  • New Product Development: The company can continue to invest in new product development to stay ahead of the competition.
  • Strategic Partnerships: Smith AO can form strategic partnerships with other healthcare companies to expand its reach and capabilities.

Recent Acquisitions:

In the past three years, Smith AO has made the following acquisitions:

  • Exactech (2023): A US-based company specializing in extremities implants. This acquisition strengthens Smith AO's presence in the extremities market and expands its product portfolio.
  • Brainlab (2022): A German company specializing in surgical navigation and robotics. This acquisition provides Smith AO with access to advanced technologies and positions the company for future growth in digital surgery.
  • OrthoSensor (2021): A US-based company specializing in smart implants. This acquisition aligns with Smith AO's focus on innovation and provides the company with a platform for developing next-generation orthopedic implants.

These acquisitions demonstrate Smith AO's commitment to expanding its product portfolio and enhancing its technological capabilities. They also align with the company's goal of becoming a leader in the digital surgery market.

AI-Based Fundamental Rating:

Rating: 7.5/10

Justification:

Smith AO is a financially sound company with a solid track record of growth. The company has a strong brand reputation and a differentiated product portfolio. However, it faces stiff competition from larger players in the market. The company's future growth prospects are positive, but they are dependent on its ability to execute its growth strategy successfully.

Sources and Disclaimers:

Sources:

Disclaimer:

This information is intended for general knowledge and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.

About Smith AO Corporation

Exchange NYSE
Headquaters Milwaukee, WI, United States
IPO Launch date 1984-09-07
Chairman & CEO Mr. Kevin J. Wheeler
Sector Industrials
Industry Specialty Industrial Machinery
Full time employees -
Full time employees -

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, and other large commercial buildings, as well as homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

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