Looking for Med-Tech Rel-Val Profile/Insight
Generalist here, hoping someone (focused in med-tech sector) has any insight on margin profiles (Gross or EBITDA) or normalized multiples for a still-in-growth, but starting to mature medtech company that sell machines + disposable instruments for said machine.
Just looking for some base-line multiple that would be appropriate for surface level valuations.
Thanks all
In general, medical device companies generate 60-70% gross margins and 25-30% operating margins. Lower gross margins usually for supplies-focused cos (BDX, BAX) and higher margins for products with therapeutic/clinical value. Overall, high value-add products, but research and sales-intensive. Multiple is going to be highly dependent on organic growth. Mature med-tech probably grows 4-6% organic. Best comparables (machines + disposables) would be STE and SYK, which trade around 16x and 20x NTM EBITDA, respectively. STE screens cheaper because of capital intensity in the contract sterilization assets. Normalized cycle multiples on these probably should be in the high-teens. ISRG is not a good comparable because business quality is among best the world (40% EBIT margins, decades of LDD EPS growth).
perfect, exactly what I was thinking of + looking for. Thank you!
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