Medtronic plc Fundamental Analysis (NYSE: MDT)
Medtronic plc (NYSE: MDT) shows moderate financial fundamentals with a PE ratio of 23.08, profit margin of 13.93%, and ROE of 10.60%. The company generates $37.5B in annual revenue with moderate year-over-year growth of 3.62%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 47.0/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze MDT's fundamental strength across five key dimensions:
Efficiency Score
WeakMDT struggles to generate sufficient returns from assets.
Valuation Score
ExcellentMDT trades at attractive valuation levels.
Growth Score
ModerateMDT shows steady but slowing expansion.
Financial Health Score
ModerateMDT shows balanced financial health with some risks.
Profitability Score
WeakMDT struggles to sustain strong margins.
Key Financial Metrics
Is MDT Expensive or Cheap?
P/E Ratio
MDT trades at 23.08 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MDT's PEG of 1.82 indicates fair valuation.
Price to Book
The market values Medtronic plc at 2.41 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.00 times EBITDA. This signals the market has high growth expectations.
How Well Does MDT Make Money?
Net Profit Margin
For every $100 in sales, Medtronic plc keeps $13.93 as profit after all expenses.
Operating Margin
Core operations generate 18.08 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.60 in profit for every $100 of shareholder equity.
ROA
Medtronic plc generates $5.61 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Medtronic plc produces operating cash flow of $8.04B, showing steady but balanced cash generation.
Free Cash Flow
Medtronic plc generates strong free cash flow of $6.13B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.79 in free cash annually.
FCF Yield
MDT converts 5.07% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
23.08
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.82
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.41
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.22
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.56
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.15
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How MDT Stacks Against Its Sector Peers
| Metric | MDT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 23.08 | 31.74 | Better (Cheaper) |
| ROE | 10.60% | 531.00% | Weak |
| Net Margin | 13.93% | 21584.00% | Weak |
| Debt/Equity | 0.56 | 0.54 | Neutral |
| Current Ratio | 0.15 | 5.58 | Weak Liquidity |
| ROA | 5.61% | -90.00% (disorted) | Weak |
MDT outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Medtronic plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
20.96%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
1.52%
Industry Style: Defensive, Growth, Innovation
GrowingFCF CAGR
1.55%
Industry Style: Defensive, Growth, Innovation
Growing