Introduction
Medtronic plc, headquartered in Dublin, Ireland, is the leading global healthcare technology company. Medtronic was founded in 1949 and today serves healthcare systems, physicians, clinicians, and patients in more than 150 countries worldwide. We remain committed to a mission written by our founder in 1960 that directs us “to contribute to human welfare by the application of biomedical engineering in the research, design, manufacture, and sale of products to alleviate pain, restore health, and extend life.”
Asset Structure Analysis
Medtronic ‘s fiscal 2024 ended on April 26, 2024 and fiscal 2023 ended on April 28, 2023.
Medtronic ‘s total assets reached $90 billion as of April 26, 2024, down from $90.9 billion as of April 28, 2023.
Goodwill was $41 billion as of April 26, 2024, accounting for 45.6% of total assets.
Other intangible assets, net were $13.2 billion as of April 26, 2024, making up 14.7% of total assets.
Property, plant and equipment, net were $6.1 billion as of April 26, 2024, representing 6.8% of total assets.
Total current assets were $22 billion as of April 26, 2024, accounting for 24.4% of total assets.
Of total current assets, cash and cash equivalents were $1.28 billion, investments were $6.72 billion, accounts receivable were $6.1 billion, inventories were $5.2 billion and other current assets were $2.6 billion.
Liquidity and Solvency
Total current liabilities were $10.8 billion with the current ratio of 2.04 as of April 26, 2024.
Total liabilities were $39.6 billion with the debt ratio of 44% as of April 26, 2024.
The amount of goodwill and other intangible assets is so huge that Medtronic’s debt ratio is undervalued.
Profitability Analysis
Medtronic’s net sales were $32.4 billion, $31.2 billion and $31.7 billion in fiscal 2024, 2023 and 2022, respectively.
In the past three years, its net sales have been almost flat.
Net income was $3.7 billion, $3.78 billion and $5 billion in fiscal 2024, 2023 and 2022, respectively.
The net profit margin was 11.4%, 12.1% and 15.8% for fiscal 2024, 2023 and 2022, respectively.
Total equity was $50.4 billion and $51.7 billion in fiscal 2024, 2023 and 2022, respectively.
The return on equity was 7.3% and 7.3% in fiscal 2024, 2023 and 2022, respectively.
Cash Flow Analysis
Net cash provided by operating activities was $6.79 billion, $6 billion and $7.35 billion in fiscal 2024, 2023 and 2022, respectively.
Additions to property, plant and equipment were $1.59 billion, $1.46 billion and $1.37 billion in fiscal 2024, 2023 and 2022, respectively.
The free cash flow was $5.2 billion, $4.54 billion and $5.98 billion in fiscal 2024, 2023 and 2022, respectively.
Dividends to shareholders were $3.67 billion, $3.62 billion and $3.38 billion in fiscal 2024, 2023 and 2022, respectively.
Repurchase of ordinary shares was $2.14 billion, $645 million and $2.54 billion in fiscal 2024, 2023 and 2022, respectively.
Medtronic’s first quarter(Q1) of fiscal year 2025, which ended July 26, 2024
The revenues were $7.9 billion and $7.7 billion in Q1 2025 and Q1 2024, respectively.
The net income was $1.05 billion and $791 million in Q1 2025 and Q1 2024, respectively.
Conclusion
We reckon that Medtronic’s reasonable valuation is about $70 billion, while Medtronic market price is $114.6 billion, which is equivalent to $89.34 per share.
Disclaimer: The content is for reference only and does not constitute investment advice.
