Dentsply Sirona, Inc. XRAY has voluntarily suspended sales and marketing of its Byte Aligners and Impression Kits as part of a regulatory review with the FDA.
During this suspension, shipments and new orders have been paused to assess compliance standards. The company aims to ensure strict adherence to quality and safety protocols, working closely with regulatory bodies and communicating with healthcare providers to maintain patient care.
XRAY Stock Movement Following the News
Following the news, shares of XRAY fell 4.5% to $23.31 at Friday’s close.
Shares of XRAY have plunged 34.5% year to date compared with the industry’s 0.8% decline. The S&P 500 has risen 21.9% in the same time frame.
Despite recent price declines, Dentsply Sirona's decision to voluntarily suspend sales and marketing of its Byte Aligners and Impression Kits reflects its commitment to regulatory compliance and patient safety. As the world’s largest manufacturer of professional dental products, Dentsply Sirona’s proactive approach and extensive portfolio underscore its dedication to advancing dental care, which may reassure investors.
More on the News
Dentsply Sirona halted sales and marketing of its Byte Aligners and Impression Kits to review compliance with specific regulatory standards. This proactive step aims to address evolving regulatory requirements and ensure Byte’s processes align with the FDA's safety and quality standards. Additional state-level regulations impacted Byte’s business model, requiring more patient documentation and professional involvement.
The company consulted the FDA before initiating this suspension. Dentsply Sirona emphasized that it prioritizes patient safety and will continue collaborating with the FDA and other regulators to address any required adjustments.
Dentsply Sirona’s financial reports do not separate Byte’s specific revenues but the segment housing Byte, Orthodontic and Implant Solutions experienced challenges in the first half of 2024, partly due to Byte’s regulatory complications and declining market conversion rates.
Dentsply Sirona will re-evaluate Byte’s resources and may redeploy its infrastructure and personnel to enhance other business areas, such as DS Core software platforms. The company aims to continue supporting underserved populations in need of accessible dental care. Additionally, it may incur further impairments or write-offs based on the outcome of this ongoing assessment.
XRAY’s Q3 Preliminary Results
Dentsply Sirona reported preliminary third-quarter 2024 financials, expecting net sales of around $951 million and adjusted EPS between 49 cents and 51 cents. Sales growth was noted in Essential Dental Solutions, offset by declines in Orthodontic, Implant, and Connected Technology Solutions. Sales timing adjustments shifted $20 million in distributor orders from the fourth quarter to the third quarter due to an upcoming ERP implementation in North America.
The company anticipates non-cash goodwill impairment charges of $450-$550 million related to its Orthodontic and Implant Solutions segment. This is due to regulatory pressure impacting Byte Aligners, weakened demand, pricing competition and geopolitical issues affecting long-term cash flow forecasts.
Dentsply Sirona will assess the next steps for Byte, which may lead to further write-offs. These preliminary results may change following end-of-quarter adjustments, with finalized details to be shared on the company’s third-quarterearnings callon Nov. 7, 2024.
Zacks Rank & Key Picks
Currently, Dentsply Sirona carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Addus HomeCare ADUS, Aveanna Healthcare (AVAH) and RadNet (RDNT). While Addus HomeCare sports a Zacks Rank #1 (Strong Buy), Aveanna Healthcare and RadNet carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has an estimated long-term growth rate of 12.1%. ADUS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 11.5%.
Addus HomeCare shares have rallied 37.8% compared with the industry's 15.6% growth year to date.
Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, with the average being 47.5%.
AVAH’s shares have gained 86.9% compared with the industry's 15.5% growth year to date.
RadNet’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 98.2%.
RDNT's shares have surged 90.8% year to date compared with the industry’s 15.5% growth.
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