Smith & Nephew SNATS Inc. Common Stock (SNN)

FairStock Score: 43/100 — MIXED

Key Financials

Strengths

• Generates $877 million in annual free cash flow (6.4% yield on market cap)
• Solid return on equity of 11.8% above cost of capital
• Attractive 2.4% dividend yield providing steady income returns
• Established organization with 16,988 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($14) with negative 125% margin of safety—limited downside protection
• Weak Piotroski F-Score of 2/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Smith & Nephew SNATS Inc. Common Stock is a mid-cap healthcare company valued at $13.6 billion. Revenue stands at $6.2 billion. From a quality standpoint, Smith shows weak Piotroski F-Score of 2/9 signaling deteriorating fundamentals and Altman Z-Score of 2.6 in the grey zone. On valuation, the stock is reasonably priced at 22.3x earnings, with trades far above its Graham Number ($14) with no margin of safety. The 2.4% dividend yield adds an income component for patient holders. Our composite FairStock Score of 43/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $877 million in annual free cash flow (6.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the healthcare space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer