HENRY SCHEIN, INC. (HSIC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $89.52, HENRY SCHEIN, INC. (HSIC) is priced for +6.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/HSIC

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Henry Schein is the dominant distributor of dental and medical supplies, but the more interesting shift is its move up the value chain into its own higher-margin Global Specialty Products and Technology lines, which the company says earn "substantially higher gross margin" than the distribution business.
• The clearest risk is execution under pressure: the company is running a $75 million to $100 million restructuring while activist investor Ananym pushes a proxy fight and a possible sale of the medical-distribution arm.
• Watch the second half of 2026, when management has said its value-creation and restructuring savings are weighted, and whether dental momentum (up 9.0% in the first quarter) holds.

Bull Case

Henry Schein is a mature company in a defensive niche, and the right way to read its numbers is as a slow-moving distribution franchise repositioning toward higher-margin businesses, not as a growth story. That framing matters because the consolidated margin understates the direction of travel. The company's own filing is explicit that gross margin "vary between our segments" and that it "realize[s] substantially higher gross margin from products we develop and manufacture within our Global Specialty Products segment compared to products distributed". Global Specialty Products net sales rose 6.7% for the year, and every dollar of mix shift toward owned specialty and technology lifts the blended margin without needing the top line to accelerate.

The core distribution business is recovering and compounding in the part that matters. In the first quarter, global dental distribution sales rose 6.1%, with Global Dental up 9.0%, offsetting softer medical demand. Dental supply distribution is the kind of recurring, consumable demand that does not disappear in a downturn: practices keep ordering the materials they use every day. On top of that, the company is taking out cost, with a restructuring plan targeting $75 million to $100 million in annual savings, weighted to the second half of 2026.

Capital allocation reinforces the maturity thesis. The share count has fallen at roughly 4% a year, direct evidence of buyback deployment showing up where it cannot be faked, and management has guided to total sales growth of 3% to 5% with margin expansion. The presence of an activist and an expanded KKR position with board seats adds a second source of pressure toward the same goal: sharper capital discipline and a cleaner portfolio. The bull case is a steady distributor with a recurring demand base, a margin-mix tailwind, and outside shareholders pushing management to harvest it.

Bear Case

The variable with the most leverage on Henry Schein is discretionary healthcare demand, and the price does not fully reflect how exposed the distribution model is to it. Dental and medical procedures are deferrable; when households tighten, elective dentistry slips, and a distributor with thin per-unit margins feels it through volume rather than price. Global medical grew just 1.7% in the first quarter against dental's 9.0%, a reminder that the segments do not move together and that the weaker one is the one an activist wants sold. A macro slowdown in elective procedures would pressure the volume the whole distribution engine runs on.

The governance and execution risk is unusually acute right now. Activist Ananym Capital is preparing a proxy fight, seeking to nominate up to six directors and pressing for cost cuts, succession planning, and a sale of the medical-distribution business, arguing the moves could lift the share price meaningfully. Activist campaigns can unlock value, but a contested board, a CEO-succession question, and a $75 million to $100 million restructuring all running at once is a lot of organizational disruption layered on a business still completing its recovery from the 2023 cyberattack that took systems offline for weeks. Each of those is manageable alone; together they raise the odds of an execution stumble in a year management has already back-loaded.

The valuation reflects a business priced for steady, not spectacular, results, which leaves little room for disappointment. On asset value and on earnings power, the price already sits above where the methods land; only the peer-multiple and growth-DCF lenses reach it, and they do so by crediting modest forward growth and the margin-mix improvement. At roughly 17 times operating income, the price embeds operating growth of around 3.6% a year, which is within what the company has delivered but assumes the restructuring lands and the activist disruption does not derail it. Net debt of about $2.2 billion against trailing operating income leaves leverage near three-and-a-third times pre-tax operating income with interest coverage around four times, comfortable in a steady year and tighter if elective demand softens while the restructuring costs run.

Valuation

Today's price works out to roughly 17 times company-wide operating income, which inverts to operating growth of about 3.6% a year over a five-year stage. Read that as a direction rather than a precise figure, but it is a telling one: the price is not asking for heroics. It asks for steady low-single-digit operating growth, which is within what this distributor has historically delivered and broadly in line with management's own 3% to 5% sales-growth guidance. This is a price set on continuation, not transformation.

The methods disagree in the pattern typical of a mature, asset-light distributor. The asset-value and earnings-power lenses read the price as full on what the company earns today, because a distribution business carries little book value relative to its market price and capitalizing current earnings without growth lands below the price. The peer-multiple and growth-DCF lenses reach today's level by crediting the modest forward growth and the ongoing shift toward higher-margin specialty and technology products. That split says the price is a reasonable bet on continuation plus a margin-mix tailwind, not a stretch beyond what standard methods support, with the relative-multiple lens landing essentially at the price.

Solvency is a supporting consideration rather than the crux. Net debt of about $2.2 billion sits at a bit over three times pre-tax operating income, with interest coverage around four times and a share count that has been shrinking, the profile of a cash-generative business returning capital rather than one under strain. The downside is bounded less by the balance sheet than by demand: a slowdown in elective dental and medical procedures would compress the volume the distribution model depends on, and that, more than any leverage concern, is what the price has to be right about. The activist push and the restructuring are the swing factors on whether the steady-continuation case improves from here or merely holds.

Catalysts

The defining near-term catalyst is the second half of 2026, by management's own framing. The company has said benefits from its value-creation programs and the $75 million to $100 million restructuring are weighted toward the back half of the year, with stronger earnings performance expected then. That makes the mid-year prints a test of whether the savings show up on schedule, against full-year guidance of 3% to 5% total sales growth. Dental momentum, up 9.0% in the first quarter, is the line to watch for whether the recovery and share gains are durable.

The governance situation is the other live catalyst and could move faster. Ananym Capital is preparing a proxy fight, nominating up to six directors and pushing for cost cuts and a potential sale of the medical-distribution business, while KKR has expanded its stake and taken board seats. Any resolution, a settlement, a board refresh, or a decision to explore a medical-distribution divestiture, would directly reshape the portfolio and the capital-allocation story. The contest gives the next several months an event-driven character on top of the operating recovery.

Peer Cohorts (Per Segment, With Filing Citations)

Global Distribution and Value-Added Services (reported)

• MCK (McKESSON CORPORATION)
• FY2025 10-K: …in a distribution arrangement. Revenue is recognized when control of goods is transferred to the customer which occurs upon the Company's delivery to the customer or upon customer pick-up. The Company also earns revenues from a variety of other sources including its retail, services, and technology businesses. Retail…
• FY2025 10-K: …in Canada. Refer to Financial Note 2, "Business Acquisitions and Divestitures," , to the consolidated financial statements included in this Annual Report for more information. U.S. Pharmaceutical Segment: Our U.S. Pharmaceutical segment provides distribution and logistics services for branded, generic, specialty,…
• CAH (Cardinal Health, Inc.)
• FY2025 10-K: …and assets for fiscal 2025, 2024, and 2023. Pharmaceutical and Specialty Pharmaceutical Distribution and Services Our Pharmaceutical Distribution businesses' gross margin includes margin from our generic pharmaceutical program, from distribution services agreements with branded pharmaceutical manufacturers, including…
• FY2025 10-K: …in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities. Our Pharma segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products in…
• COR (CENCORA, INC.)
• FY2025 10-K: …and various other products to customers in both the companion animal and production animal markets. It also offers its customers a variety of value-added services, including its e-commerce platform, technology management systems, pharmacy fulfillment, inventory management system, equipment procurement consultation,…
• FY2025 10-K: …business. We are well positioned to grow revenue and increase operating income through the execution of the following key elements of our business strategy: • Optimize and Grow U.S. Healthcare Solutions Businesses. We are well positioned in size and market breadth to continue to grow our U.S. Healthcare Solutions…

Global Specialty Products (reported)

• XRAY (DENTSPLY SIRONA Inc.)
• FY2025 10-K: …and the Company sells products globally through its foreign subsidiaries to customers in approximately 140 countries. Dentsply Sirona has a long-established presence in the European market, particularly in Germany, Sweden, France, the United Kingdom ("UK"), Italy, and Switzerland. The Company also has a significant…
• FY2025 10-K: …with sales‑specific onboarding, product training, coaching, mentoring, development pathing, and sales‑focused leadership development. Lastly, we have five Communities of Practice, which are groups of employees united to share knowledge in critical skill areas, including Change, Project Management, Sales, Cultural…
• ALGN (ALIGN TECHNOLOGY, INC.)
• FY2025 10-K: …cases worldwide, including in Costa Rica, China, Germany, Spain, Poland, and Japan, among others. By establishing and expanding our key operational activities in locations closer to our customers, we are creating an infrastructure that allows us to be responsive to local and regional needs, while providing global…
• FY2025 10-K: …well positioned to compete in the markets we target. We have thousands of dedicated, highly skilled sales force employees who are focused on key portions of our target markets that allow us to uniquely address customer needs and thereby enhance the customer experience. Our significant historical and ongoing…
• STE (STERIS plc)
• FY2025 10-K: …maintain, upgrade, repair, and troubleshoot capital equipment throughout the world. We offer various preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime. Our Healthcare segment also provides comprehensive instrument, devices, and endoscope…
• FY2025 10-K: …for performance assessment and resource allocation. The CEO regularly receives discrete financial information about each reportable segment and uses this information to assess performance and allocate resources. The accounting policies of the reportable segments are the same as those described in Note 1 to our…
• GMED (GLOBUS MEDICAL, INC.)
• FY2025 10-K: …to increase the amount of surgical volume performed locally. Additionally, we offer flexibility to customers for our capital equipment within our Excelsius ® ecosystem by offering capital sales and leasing arrangements. Intellectual Property We protect our proprietary rights through a variety of methods. In…
• FY2025 10-K: …launch. We believe our approach to product development is unique and highly efficient. We employ an integrated team approach to product development involving collaboration among surgeons, our engineers, our dedicated researchers, our highly-skilled machinists, and our regulatory personnel. We believe that this team…
• ATEC (Alphatec Holdings, Inc.)
• FY2025 10-K: …reflect the Company's future ability to collect outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required. F- 12 Table of Contents The Company's accounts…
• FY2025 10-K: …spinal implant products. Some of our competitors also provide non-operative therapies for spine disorder conditions. While these non-operative treatments are considered to be an alternative to surgery, surgery is typically performed in the event that non-operative treatments are unsuccessful. We believe that, to…
• SNN (Smith & Nephew plc)
• FY2025 20-F: …to drive production of our end products. The performance of these suppliers directly impacts our manufacturing schedule, with further implications for our commercial colleagues, customers and patients. In 2025, we continued to improve the identification, selection, and management of our suppliers. We continued to…
• FY2025 20-F: …ability to meet customer demand. - Defects in design or manufacturing of products supplied to, and sold by, the Group could lead to product recalls or product removal or result in loss of life or major injury. - Significant non-compliance with policy, regulations or standards governing products and operations…

Global Technology (reported)

• VEEV (Veeva Systems Inc.)
• FY2025 10-K: …tariffs, or other international laws; or if the demand for life sciences products globally deteriorates for other reasons, our customers may delay or reduce their IT spending, particularly within the regions impacted by negative economic or geopolitical conditions. For example, a number of significant life sciences…
• FY2025 10-K: . We use a combination of base salary and equity to compensate our employees. We also offer a range of benefits to our employees, including comprehensive healthcare and other wellness programs. We believe our compensation and benefits programs are competitive. We do not require any of our employees anywhere in the…
• DOCS (Doximity, Inc.)
• FY2025 10-K: …like WebMD's Medscape. ◦ Hiring: We compete in the healthcare staffing industry with job boards, self-service recruiting tools, and medical recruiting firms in national, regional, and local markets. We compete with large healthcare staffing companies as well as smaller, more regionally focused companies. ◦ Health…
• FY2025 10-K: …tools are used and trusted by hundreds of thousands of our members, and continue to drive daily use among physicians. The strong adoption of our AI-powered workflow tools, Dialer, and AMiON, at both the physician and enterprise level, reflects that professional trust, and we continue to look for opportunities to…
• EVCM (EverCommerce Inc.)
• FY2025 10-K: …restructuring of operations, exclusion from participation in governmental healthcare programs and imprisonment. I-10 Intellectual property Protecting our intellectual property and proprietary technology is an important aspect of our business and continued growth. We rely on a combination of trademark, copyright,…
• FY2025 10-K: …solutions. We believe that investment in technology development will contribute to our long-term growth, but may also negatively impact our short-term profitability. In 2025, we continued to invest in scalable operations, including vertical market leadership, and necessary functions to support operating as a public…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.