Sonic Healthcare (SHL.AX)
Healthcare · ASX · Australia
Fundamentals
Valuation and ratings
Sonic Healthcare trades at A$21.78, close to the A$22.59 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 46 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 19.1 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Sonic Healthcare
Sonic Healthcare Limited offers medical diagnostic services, and administrative services and facilities to medical practitioners in Australia, the United States, Germany, and internationally. The company provides laboratory medicine/pathology testing services, such as biochemistry, cytopathology, genetics, haematology, histopathology, immunoserology, microbiology, molecular pathology, prenatal testing, toxicology, and ancillary functions; and radiology services, including magnetic resonance imaging, computed tomography (CT), ultrasound, X-ray, mammography, nuclear medicine, PET CT, interventional procedures, and bone mineral densitometry. It also offers primary care medical services comprising general practice clinics, occupational health services, skin cancer clinics, general practice IT solutions, and community-based healthcare services, as well as clinical trials services. Sonic Healthcare Limited was incorporated in 1934 and is headquartered in Sydney, Australia.
SHL.AX passes 5 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Sonic Healthcare (SHL.AX) undervalued?
Against our discounted cash flow estimate of A$22.59, SHL.AX at A$21.78 is 4% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is SHL.AX's P/E ratio?
SHL.AX trades at 19.1 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.