ICU MEDICAL INC/DE (ICUI): what the price requires
At today's price, ICU MEDICAL INC/DE (ICUI) is priced for +12.5% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/ICUI
Headline
| Field | Value |
|---|---|
| Ticker | ICUI |
| Company | ICU MEDICAL INC/DE |
| Current price | $156.49/sh |
| Composition | Consumables 50% / Infusion Systems 31% / Vital Care 20% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 6.6% |
| Operating margin (mid-cycle) | 12.6% |
| Margin compression implied | -6.0pp |
| Trailing margin (depressed year) | 2.3% |
| Implied growth | 12.5% |
| Multiple paid | 18x mid-cycle operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.00σ |
| cohort percentile (of 112 peers) | 34 |
| sustained it ~5 years at this level | 53% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 10.86x | 4 | expensive |
| Earnings | 2.61x | 1 | expensive |
| Relative | 1.63x | 2 | expensive |
| Growth | — | 0 | — |
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 7.2%); the inversion above states its own rate.
Per-Model Detail (n=7)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | FCF base $0.1B, growth -10% (input: historical growth), terminal g 0.5%, WACC 7.2%, 5yr projection |
| DCF Exit Multiple | Growth | $95.74 | 1.63x | no | Exit EV/EBITDA: 19.5x / 21.5x / 23.5x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $90.63 | 1.73x | yes | P/E 42.31x (blended: static sector reference 24x + trailing (TTM) 85x), scenarios: 35.8x / 42.3x / 48.9x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $19.89 | 7.87x | yes | BV/sh $83.87, ROE (TTM) 2.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $11.29 | 13.86x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $55.78 | 2.81x | no | Rev $2.2B, growth -11% (input: historical growth; tapered), Terminal P/S: 1.5x / 1.8x / 2.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $22.32 | 7.01x | no | EPS $1.86, growth 2% (input: historical EPS growth), PEG=50.20 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $0.01 | 15649.00x | no | Normalized EBIT (5y avg op income, one-time charges added back) $0.05B × (1−21%) / WACC 7.2% → EPV (no growth) |
| Residual Income | Asset | $8.23 | 19.01x | yes | BV $83.87 + 5yr PV of (ROE (TTM) 2.2% − Kₑ 9.3%) × BV; BV grows 1.4%/yr |
| Graham Number | Asset | $59.24 | 2.64x | yes | √(22.5 × EPS $1.86 × BVPS $83.87) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $102.56 | 1.53x | yes | EBITDA $0.24B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $0.01 | 15649.00x | yes | FCF $82.7M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 15649.00x | yes | SBC-adj FCF $0.03B (FCF $0.08B − SBC $0.06B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $60.02 | 2.61x | yes | EPS $1.86 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.63 | 43.11x | yes | BV $83.87 × (ROIC 0.3% / WACC 7.2%) (excluded from median) |
| P/Sales Sector | Relative | $342.59 | 0.46x | no | Revenue $2.16B × sector P/S 4.0x |
| PEG Fair Value | Relative | $69.75 | 2.24x | no | EPS $1.86 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $20.11 | 7.78x | no | EPS $1.86 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $997.2m |
| Net debt / NOPAT (after-tax) | 4.50x |
| Net debt / operating income (pre-tax) | 3.56x |
| Interest coverage | 3.6x |
| Share count CAGR (dilution) | 1.6% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 12.6%); the trailing year was depressed.
Bullet Takeaways
- ICU Medical makes infusion pumps, the consumable sets that run with them, and related critical-care products, and the entire investment case rests on whether margins recover from the integration of its large acquisitions.
- The decisive metric is gross margin: it expanded to about 39% in the first quarter of 2026 from 35% a year earlier, evidence the turnaround is taking hold even as reported revenue fell 12% on a prior divestiture.
- The defining risk is the balance sheet: long-term debt of about $1.28 billion against thin trailing operating income leaves interest coverage near three times, so margin recovery has to keep funding the deleveraging.
Bull Case
The single most decisive number for ICU Medical is gross margin, and it is moving the right way. After years of digesting the Smiths Medical acquisition and absorbing supply-chain and integration costs, the company's profitability had collapsed, and the trailing operating margin of about 2% reflects that trough. The first quarter of 2026 showed the recovery: gross margin expanded to roughly 39% from 35% a year earlier, GAAP net income swung to $30.1 million from a prior-year loss, and adjusted earnings per share rose 15% to $1.97, beating expectations. For a medical-device business with a fixed manufacturing base, gross-margin expansion is the lever that flows straight to the bottom line, and a four-point move in a single year is a strong signal that the integration drag is easing.
The underlying franchise is more stable than the headline revenue suggests. Reported revenue fell 12% to about $530 million, but almost all of that decline was the prior divestiture of the IV Solutions business and a joint-venture deconsolidation; on an organic basis revenue grew about 1%, and the Infusion Systems segment posted record revenue. Infusion pumps are sticky: once a hospital standardizes on a pump platform and the matching consumable sets, switching is costly and clinically disruptive, which gives ICU Medical a recurring consumables stream attached to its installed base. That razor-and-blade dynamic is the durable core under the turnaround.
The cash story supports the deleveraging path the equity needs. Free cash flow was $27.6 million in the quarter, directed at paying down the roughly $1.28 billion of long-term debt, and management reaffirmed its full-year guidance for revenue, EBITDA, earnings, and free cash flow despite macro headwinds. The price reflects a normalized operating margin near 13%, well above the depressed trailing level, and the bull case is that the company earns its way back to that normalized profitability as integration costs roll off. If the margin recovery continues and the cash keeps reducing the debt, the equity benefits twice, from rising profit and from a shrinking interest burden.
Bear Case
The uncomfortable truth a holder has to sit with is that ICU Medical is being priced on a recovery that has only just begun, and the gap between the price and what the business currently earns is enormous. The stock trades at $141.05 (June 27, 2026), but on its trailing economics the company barely earns anything: return on equity is about 2.2%, return on invested capital about 0.3%, and the operating margin about 2%. The asset and earnings-power methods, which read book value and current profit, land far below the price, with the book-value-based methods near $8 to $20 per share. None of the standard valuation lenses reaches the price, because the price is not paying for what ICU Medical earns today; it is paying for what the company might earn if the margin recovery fully plays out. That is a bet on execution, and the recovery is one good quarter old.
The balance sheet turns that execution bet into a leveraged one. ICU Medical carries about $1.28 billion of long-term debt against thin trailing operating income, leaving interest coverage near three times, and the debt is largely variable-rate. The company's own filing lays out a leverage-ratio-tiered pricing grid on its credit facility, where the interest margin steps up when leverage exceeds 4.0 times, and it flags that "Our variable-rate term loans and revolving credit facility are exposed to changes in interest rates". That structure means the cost of the debt rises exactly when the business is most stressed: if the margin recovery stalls, leverage stays high, the interest margin steps up, and more of the recovering cash flow goes to lenders rather than shareholders.
The competitive backdrop limits how fast the recovery can run. ICU Medical competes against larger, better-capitalized medical-device makers, and its own 10-K names the risk of failing to compete successfully and maintain market share, alongside the risk of a significant decline in demand for its products. Hospital capital budgets are under pressure, pump replacement cycles are long, and pricing in the consumables business is competitive. Organic growth of about 1% is not the kind of top-line momentum that powers a quick turnaround; it puts the entire weight on margin expansion and cost control. The downside is not imminent insolvency, the cash flow is positive and covers the interest. It is that the price assumes a full margin recovery in a leveraged, slow-growth, competitive business, and any stumble in that recovery exposes how far the price sits above the company's demonstrated earnings.
Valuation
The price is a bet on margin normalization, plainly stated. The trailing operating margin of about 2% is deeply depressed by integration and divestiture effects, and the model values the company against a normalized mid-cycle margin of about 12.6%, far above the trailing figure. The implied assumption is mid-single-digit-plus growth combined with that margin recovery, which is the right frame for a turnaround but is also the entire risk: the valuation rests on a profitability level the company has not earned recently and is only beginning to recover toward.
How far the price sits from the methods is stark, and it reflects the trough. No family of valuation method reaches $141.05. The asset and earnings-power lenses land far below, near $8 to $60 per share, because a near-zero return on a large book value of $83.87 generates almost no economic value at current profitability. The relative-multiple methods, reading the price against sector multiples, land near $88 to $103, still below the price. The price is supported only by the expectation of normalized earnings, not by any standard method applied to current results. The spread is the recovery premium, and it is large, several times the asset and earnings-power values. The right peer comparison is the medical-device cohort, Integer, Merit Medical, Steris, and others, where margin and return profiles are the relevant benchmark, and ICU Medical currently sits at the bottom of that range with the recovery ahead of it.
Solvency is the variable that decides the bet, and it is the area to watch most closely. Net debt of about $997 million sits at roughly four times normalized operating income on an after-tax basis, interest coverage is near three times, and the debt is largely variable-rate with a leverage-tiered pricing grid, so a slower recovery raises the cost of the debt. Free cash flow of $27.6 million is being directed at deleveraging, the right priority. The decisive number is the gap between the 2% margin the company earns today and the roughly 13% the price assumes it recovers to, layered on a balance sheet that does not leave much room for the recovery to disappoint.
Catalysts
ICU Medical reported first-quarter 2026 results on May 7, 2026, and beat expectations while showing the turnaround taking hold. Revenue fell about 12% to roughly $530 million, but the decline was almost entirely the prior IV Solutions divestiture and a joint-venture deconsolidation; on an organic basis revenue grew about 1%. The encouraging signals were profitability: gross margin expanded to roughly 39% from 35%, GAAP net income reached $30.1 million versus a prior-year loss, and adjusted earnings per share rose 15% to $1.97, ahead of the $1.76 estimate. The Infusion Systems segment posted record revenue.
The forward story is margin and deleveraging. Management reaffirmed full-year guidance for revenue, EBITDA, earnings, and free cash flow, citing core-business momentum and ongoing margin expansion, and free cash flow of $27.6 million is being applied to reduce the roughly $1.28 billion of long-term debt. The watch items are the durability of the gross-margin recovery, the pace of debt reduction given the variable-rate exposure, and whether organic growth can accelerate beyond the low-single-digit pace. Because the price assumes a full return to normalized margins, each quarter's progress on profitability and deleveraging is the signal that determines whether the turnaround thesis holds.
Peer Cohorts (Per Segment, With Filing Citations)
ICU Medical (consolidated) (reported)
- BAX (BAXTER INTERNATIONAL INC)
- (no filing in the citation store)
- MMSI (MERIT MEDICAL SYSTEMS INC)
- (no filing in the citation store)
- ITGR (INTEGER HOLDINGS CORPORATION)
- (no filing in the citation store)
- HAE (HAEMONETICS CORPORATION)
- (no filing in the citation store)
- SOLV (SOLVENTUM CORPORATION)
- (no filing in the citation store)
- STE (STERIS plc)
- (no filing in the citation store)
- ZBH (ZIMMER BIOMET HOLDINGS, INC.)
- (no filing in the citation store)
- WST (WEST PHARMACEUTICAL SERVICES, INC.)
- (no filing in the citation store)
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.
- 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.
Sources
ICU Medical Q1 2026 earnings release, May 2026 · ICU Medical FY2025 10-K, accession 0000883984-26-000008