Henry Schein is scored 35 for moat and 67 for management. The management score rests on a return on invested capital of 6.6% and a gross margin of 29.1% — figures that describe a business earning a respectable return on what it employs. Debt sits at 1.14x equity. A narrow moat alongside strong management is a combination worth understanding before the price matters at all.
Three independent anchors set the price worth paying. Growth is modelled at 5.4% a year, the rate measured from the filings. The exit multiple assumed is 10.9x. That produces an intrinsic value of $15.64, a 10-CAP price of $51.34 and a payback time price of $52.50, with the value zone set at the highest of the three, $52.50. Today's price of $84.93 is 62% above it.
The price is above the value zone and the business scores 35 for moat and 67 for management. Neither test argues for paying up here.
| Price | $84.93 |
| Market cap | $9.7B |
| P/E ratio | 24.8x |
| Return on invested capital | 6.6% |
| Gross margin | 29.1% |
| Debt to equity | 1.14x |
| Free cash flow yield | 6.2% |
| Growth rate used | 5.4% |
| Growth rate measured | 5.0% |
| Exit multiple assumed | 10.9x |
| Company | Moat | Buy price |
| The Ensign Group, Inc. (ENSG) | 96 | $126.29 |
| Molina Healthcare Inc (MOH) | 39 | $92.07 |
| Insulet Corporation (PODD) | 82 | $82.38 |
| Align Technology (ALGN) | 51 | $134.51 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Henry Schein rather than accepting ours.