QS Research · Michael Burry's Scion Capital analyst template · 2006
GE HealthCare Technologies Inc. (GEHC)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $83.65 (close 2026-11-10)
Conclusion: LONG
Conviction medium · base case +55% · downside -24% · upside +63%
The market is pricing GEHC at 17.6x TTM net income and 12.8x TTM EBITDA as if the 2026-04-29 PDx supplier shock, the $250M of memory-chip, freight and raw-material inflation and the Q2 2026 PCS loss were permanent, when the 2026-10-28 Q3 release showed revenue +7.2% to $5,513M, Adjusted EBIT margin of 16.6% (+180 bps) and FY2026 Adjusted EPS guidance raised to $4.95-$5.05 with $1.6B+ of free cash flow. Insiders put $6.4M to work at $59.92-$64.18 between 2026-04-30 and 2026-05-22, including a $5.0M purchase by director Culp on 2026-05-06, and Dodge & Cox lifted its stake to 10.5% in the 13G/A filed 2026-08-07 - those dated events, not the cheapness itself, are the basis on which the shares can re-rate from 17.6x toward the 27.25x peer median P/E. On that anchor the base case is $129.51 (+55%: 27.25x x $2.15B TTM net income / 452.14M shares) and the upside $136.25 (+62.9%: 27.25x x the $5.00 FY2026 adjusted EPS midpoint). I assume a 10% decline in the TTM earnings base in the downside, which at a compressed ~15.0x P/E (15% below today's 17.6x) gives about $64, or -23.5%. ROIC of 12.0% against an 8.5% WACC and roughly $2.25B of owner earnings on a $37.82B market cap (5.9% owner-earnings yield, same as the FCF yield, with capex only 15% of EBITDA) say the TTM numbers do not warrant a broken-business multiple. The caveat is the anchor itself: the peer median is lifted by BDX at 61.5x, and at the 22x top of section 13's own P/E range the value is about $105 (+25%), so conviction is medium rather than high.
Key numbers
- Share price: $83.65
- Market cap: $37.82B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $21.64B
- EV / EBITDA (TTM): 12.8x
- P/E (TTM): 17.6x
- Price / book: 3.26x
- Earnings-quality flags (TTM): none flagged
- Revenue growth (latest fiscal year): +4.8%
- ROIC (TTM): 12.0%
- WACC: 8.5%
- Economic profit spread: +3.5 pts
The 15 boxes
- ✓ 1. Long-form business notes
GE HealthCare is a four-segment medical technology, pharmaceutical diagnostics and software company (Imaging, AVS, PCS, PDx) that sells equipment, consumables, service contracts and AI/cloud software into hospitals and health systems in over 160 countries, with roughly 54,000 employees (FY2025 10-K). Revenue has grown every year in the XBRL series, from $17.59B in FY2021 to $20.62B in FY2025 and $21.64B on a TTM basis to 2026-09-30, with operating income of $2.76B in FY2025 and $2.88B TTM and net income to common of $2.08B and $2.15B respectively. The biggest structural change between the FY2022 and FY2025 annual reports is segment shape: the 'Ultrasound' segment became 'Advanced Visualization Solutions' and Imaging went from six product lines (including Image-Guided Therapies) to five, with interventional and surgical C-arms now inside AVS Procedural Guidance. Results are seasonally Q4-heavy, and the sources give no segment-level revenue or margin, so unit economics by segment cannot be shown.
- ✓ 2. Competitive advantage
GEHC has scale (revenue $20.62B FY2025; $21.64B TTM to Sep 2026) and a service network, but the record shows little operating leverage: operating income was $2.76B FY2025 versus $2.79B FY2021. Competition is broad—Siemens Healthineers, Philips, United Imaging, Mindray and Canon globally, and Bayer, Bracco, Guerbet and Curium in PDx—and the 10-K cites pricing pressure, customer consolidation, ISO/right-to-repair encroachment and 2025 tariff costs. I see a narrow service advantage at best, not a durable wide moat.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue was $5,513M, up 7.2% reported and 6.2% organic, with all three segments growing; Q3 operating income was $805M (14.6% of revenue, +190 bps) and Adjusted EBIT was $913M (16.6%, +180 bps). Nine-month organic growth was 4.2%, but operating margin was 12.9% (-10 bps) and Adjusted EBIT margin 14.8% (flat). Inventory rose to $2,628M from $2,234M at Dec 31 2025, while cash, cash equivalents and restricted cash fell to $2,854M from $4,512M; the Q3 earnings release raised FY2026 guidance. The 10-Q Item 1A says no material changes to risk factors.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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