Baxter International Inc (BAX) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Baxter International's EV/EBITDA of 17.0 is above its 5-year median of 16.3.

P/B below the industry

Baxter International's price-to-book of 2.10 is below the Surgical, Medical, and Dental Instruments and Supplies median of 3.22.

Trading above fair value

The share price of $26.34 is above our fair value estimate of $24.81.

Margin of safety under 20%

The price is 6.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 5.3% over the last twelve months; the Surgical, Medical, and Dental Instruments and Supplies median is 11.0%.

Guidance raised

Baxter International raised its full-year Adjusted earnings from continuing operations per diluted share outlook on Jul 30, 2026.

Gross margin slipping

Gross margin was 30.1% over the last twelve months, against 34.1% a year earlier.

Return on equity under 15%

Return on equity was -10.5% over the last twelve months and averaged -0.8% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -3.0%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Baxter International's return on equity of -10.5% is above the Surgical, Medical, and Dental Instruments and Supplies median of -31.3%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -6.2% over the last twelve months, against a 5-year average of -0.5%.

Net margin above the industry

Baxter International's net margin of -6.2% is above the Surgical, Medical, and Dental Instruments and Supplies median of -14.1%.

Low debt

Debt is 13.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 71.3% five years ago to 13.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 194% of total debt.

Interest not well covered

Operating income covers interest expense -0.8 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.79 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.40; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Baxter International paid dividends worth 0.2% of the share price over the last twelve months.

Yield below Treasuries

The 0.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Baxter International yields 0.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.