The Zacks Medical - Dental Supplies industry in the Medical sector has a robust demand for dental services, driven by patient preferences for timely and convenient care, as well as policy initiatives aimed at enhancing access to dental health services. Dental practices witnessed heightened patient engagement over the past six months. This growth is driven by increased demand for various dental services, including cosmetic and preventive care.
The pricing environment looks promising on the back of continued rise in dental service prices, driven by inflation, changes in insurance coverage, and proactive pricing strategies by dental providers. Per the Fortune Business Insight data, the global dental industry is expected to reach $87.65 billion at a CAGR of 11.5% in the 2023-2032 period. Industry participants, such as Cardinal Health CAH, Merit Medical Systems MMSI, Dentsply Sirona XRAY and CONMED CNMD have shown encouraging trends amid uncertain times and are likely to gain from the market opportunities.
Industry Description
The global dental industry consists of companies that design, develop, make and market dental products, such as consumables, laboratory products and specialty items. Some of these companies also offer software and systems for practice management, patient education and office administration. Dental stocks have been drawing attention amid a recovery in sales after the weakness faced due to the pandemic-induced disruptions. The market has been recovering and maintaining its position.
Notably, dental care is being provided based on the advice and recommendations of the American Dental Association and the CDC. Thanks to the rebound seen by the companies in this space, patient volume has been increasing steadily despite the uncertainty surrounding COVID-19.
Major Trends Shaping the Future of the Medical Dental Supplies Industry
Increasing Burden of Oral Diseases and an Aging Population: The dental equipment market in the United States is driven by the country's growing geriatric population. This group is a significant demographic in dental surgeries and other dental practices. Per the U.S. Census Bureau, the country had 55.8 million people aged 65 and above in 2020. Old age increases the likelihood of dental issues such as cavities, root and coronal caries, and periodontitis. Consequently, the rising number of seniors in the country is a key contributor to the market’s growth.
Demand for Esthetic and Cosmetic Dentistry: The dental equipment market in the United States is growing due to the demand for esthetic and cosmetic dentistry. People, influenced by Internet strategies, current trends and media coverage, want to improve their dental appearance. Cosmetic dentistry, which started in the United States, has led to many innovations in the field. Patients in the country are looking for procedures that can enhance their smile and restore dental functions. This trend is boosting the growth of the U.S. dental equipment market.
Technological Advancements: Dental procedures are changing with new technologies like digital imaging, laser dentistry and CAD/CAM systems. These technologies make treatments more accurate and effective, leading to better results.
Also, new materials have been developed that are stronger, more compatible and attractive, giving dental practitioners more product options. Moreover, AI is being integrated into dental diagnostics and practice management. Tools like AI-powered imaging systems and predictive analytics are improving diagnostic accuracy and operational efficiency.
Emerging Markets Driving Growth: Emerging markets are significantly propelling the dental equipment industry's growth. Factors such as rising disposable incomes and increased awareness of oral health are driving demand in these regions. In the Asia-Pacific region, countries like India, China and Thailand are experiencing increased demand due to rising disposable incomes and heightened oral health awareness. Similarly, the GCC region anticipates its dental equipment market to reach $1.2 billion by 2028, driven by increased dental awareness and supportive government policies.
U.S. Tariff Headwinds: In 2025, U.S. tariffs on dental imports from countries such as China, Mexico and Canada may create significant challenges for the dental industry. The American Dental Association and other industry stakeholders have raised concerns regarding these tariffs driving up costs for essential supplies like dental instruments, imaging equipment and consumable materials. This financial pressure is likely to affect patients directly, as higher expenses may result in delayed or reduced access to preventive and routine dental care, potentially worsening overall oral health outcomes.
Zacks Industry Rank
The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector.
It carries a Zacks Industry Rank #92, which places it in the top 37% of 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few dental supply stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Performance
The industry has underperformed its sector as well as the S&P 500 composite in the past year.
Stocks in this industry have collectively declined 4.5% compared with the Zacks Medical sector’s fall of 11.6%. The S&P 500 has gained 6.4% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 16.2X compared with the S&P 500’s 19.7X and the sector’s 21.2X.
Over the past five years, the industry has traded as high as 20.9X and as low as 14.9X, with the median being 18.5X, as the charts show.
Price-to-Earnings Forward Twelve Months (F12M)
Price-to-Earnings Forward Twelve Months (F12M)
4 Promising Dental Supply Stocks
Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The company continued to witness strong demand for its Pharmaceutical and Specialty solutions. CAH’s medical products and at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics are likely to support top-line growth. The company signed two acquisition deals last month to accelerate its strategic growth areas and enhance patient care. CAH is likely to strengthen its multi-specialty business as the GI Alliance buyout is expected to operate as a platform within its Pharmaceutical and Specialty Solutions segment. The acquisition of Advanced Diabetes Supply Group is likely to boost CAH’s at-Home Solutions business.
Improvement in segmental profit looks promising. The expansion of gross margin also bodes well. However, sales are likely to be under pressure due to OptumRx contract expiration.
CAHexpects earnings per share (EPS) to be in the $7.85-$8.00 range for fiscal 2025, up from the prior outlook of $7.75-$7.90. Meanwhile, multiple acquisitions in 2024 buoy optimism as they are likely to boost the company's Specialty business and supply cutting-edge personnel, capabilities and technology that meet important demands for its customers and the business.
The Zacks Consensus Estimate for fiscal 2025 revenues indicates a decline of 1.9% from the year-ago reported figure, while the same for earnings implies an improvement of 5.4%. CAH has a trailing four-quarter average earnings surprise of 9.64%. It carries a Zacks Rank #3 (Hold) at present.
Price and Consensus: CAH
Merit Medical provides various peripheral and cardiac intervention products to cure cardiac conditions specific to interventional cardiology and electrophysiology. The company continues to see revenue growth in both its segments and across all product categories within its Cardiovascular unit. Robust performance in the United States and outside during the third quarter were impressive. The expansion of gross margin bodes well for the stock.
During the third quarter, Merit Medical completed the acquisition of certain assets from EndoGastric Solutions, Inc., which included the EsophyX Z+, and entered into an asset purchase agreement for the acquisition of the lead management portfolio of medical devices and certain related assets from Cook Medical Holdings LLC. MMSI also announced positive six-month findings from a pivotal trial relating to the Wrapsody Cell-Impermeable Endoprosthesis device, which is intended to extend long-term vessel patency in dialysis patients. These look promising for the stock.
In May, the company launched the basixSKY Inflation Device, which is available as a standalone product and in kits with Angioplasty Packs, further diversifying its product range. Additionally, it received FDA 510(k) clearance for the Siege Vascular Plug and introduced the Bearing nsPVA Express Prefilled Syringe in the United States and Australia.
It expects total revenue growth of 8.4-9.8% for 2025. MMSI projects sales at Cardiovascular segment and Endoscopy segment to grow 7-9% and 36-40%, respectively. Adjusted EPS for 2025 is projected to be in the range of $3.58-$3.70, implying 4-7% growth.
The Zacks Consensus Estimate for 2025 revenues indicates year-over-year growth of 9% and the same for earnings suggests an improvement of 5.8%. Currently, the company carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: MMSI
Dentsply Sirona: It is a global leader in the design, development, manufacture and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products.
In addition, it provides dental technology products (including dental implants and related scanning equipment, treatment software and orthodontic appliances) for dental practitioners and specialists, and dental equipment (such as treatment centers, imaging equipment and computer-aided design and machining systems) for dental practitioners. Further, the company offers healthcare consumable products, such as urology catheters, medical drills and other non-medical products.
DENTSPLY’s computer-aided design CAD/CAM is a dental imaging platform and a major foundation in global dental markets. CAD/CAM is a field of dental supplies and prosthodontics using computer-aided design and computer-aided manufacturing technologies. Per Fortune Business Insights, the global dental CAD/CAM market will witness a CAGR of more than 9% till 2030. We believe that DENTSPLY is likely to benefit from the trends. The company expects adjusted EPS to be in the range of $1.80-$2.00 for 2025. Revenues are expected to decline 2-4% from the 2024 level.
For this York, PA-based company, the Zacks Consensus Estimate for 2025 revenues indicates a 6% decline from the prior-year reported figure, while the same for earnings implies an increase of 8.4%. XRAY has a trailing four-quarter average negative earnings surprise of 9.34%. Presently, the company carries a Zacks Rank #3.
Price and Consensus: XRAY
CONMED: It is a major medical products manufacturer specializing in surgical instruments and devices for minimally invasive procedures and monitoring. A significant portion of the company’s revenues is derived from products designed for the orthopedic surgery markets of arthroscopy and powered surgical instruments. The company also sells products for general and other surgical specialties, such as electrosurgery systems for all types of surgery and endosurgery instruments for minimally invasive laparoscopic surgery.
The fourth quarter witnessed the positive impact of strong demand for CNMD’s AirSeal insufflator, which is expected to continue driving top-line growth in the upcoming quarter as well. Per the fourth-quarter earnings call, CNMD is prioritizing growth areas like AirSeal, Buffalo Filter, BioBrace and the Foot & Ankle portfolio, with significant investments and strategies to strengthen these high-potential segments in 2025. Per management, gross margins for 2025 are expected to remain flat due to continued supply-chain challenges and currency headwinds, with little room for further short-term improvements.
It now expects adjusted EPS to be in the range of $4.25-$4.40 for 2025. Revenues are expected to grow 4-6% from the prior-year figure.
For this Utica, NY-based company, the Zacks Consensus Estimate for fiscal 2025 revenues indicates growth of 4% year over year, while the same for earnings implies an increase of 4.3%. CNMD has a trailing four-quarter average earnings surprise of 7.75%. Presently, the company carries a Zacks Rank of 3.
Price and Consensus: CNMD
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