HSIC

Henry Schein is a leading global distributor of dental, medical and animal-health products and a provider of practice-management technology. FY2025 was a steady-but-unspectacular year: revenue grew 4.0% to $13.2B, operating income rose 5.2% to $653M, net income increased 2.1% to $398M, and diluted EPS rose 7.2% to $3.27. Distribution is a thin-margin business by nature — gross margin 31.1%, operating margin 5.0%, net margin 3.0% — so the model relies on scale, supplier rebates and a growing mix of higher-margin technology and specialty products. The multi-year picture shows pressure: net income has declined from $631M (FY2021) to around $398M, even as revenue has crept higher, reflecting margin erosion and the lingering effects of the October 2023 cybersecurity incident.

The EPS growth ahead of net-income growth is driven by aggressive buybacks: $850M of repurchases (up 120.8%) shrank the share count 7.6%. That capital return, funded partly by debt (liabilities/equity rose to 1.98x, short-term borrowings up 17.5% to $764M), signals management's belief the stock is undervalued — and at 0.7x sales and 24.4x earnings, the valuation is undemanding for a market-leading distributor. Operating cash flow did soften 16.0% to $712M, worth monitoring.