QS Research · Michael Burry's Scion Capital analyst template · 2006
Medtronic plc (MDT)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -5% · downside -27% · upside +18%
The market is not missing much: MDT is near its 52-week high ($101.80 vs $106.33) and trades at 24.9x TTM P/E and 15.6x TTM EBITDA, with leverage making the equity multiple look worse than the operating multiple. On the section 13 TTM base (EBITDA $9.72B, debt $30.67B, cash $8.82B, 1.27914B shares), a 15.0x base multiple gives $145.8B EV, $123.95B equity and $96.9/share, -4.8%; 12.0x gives $74.1 (-27.2%) and 18.0x gives $119.7 (+17.6%). The operating story is improving (Q1 FY27 organic +13.7%, FY27 guidance raised, MiniMed split-off retiring 55M shares), but the Q1 beat is flattered by an extra week and margin drags from tariffs/Blackstone remain. Deep-value conclusion: watch, not long, because the base case is not +30% and the downside breaches the long rule's -25% floor; not short because upside is only +17.6% and the franchise still generates $6.13B FCF.
Key numbers
- Share price: $101.80
- Market cap: $130.22B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $37.54B
- EV / EBITDA (TTM): 15.6x
- P/E (TTM): 24.9x
- Price / book: 2.59x
The 15 boxes
- ✓ 1. Long-form business notes
Medtronic sells implantable devices, catheters, capital equipment and consumables used by physicians in more than 150 countries, organized in FY2026 into three reportable segments: Cardiovascular, Neuroscience and Medical Surgical. Reported scale is $36.36B of revenue in FY2026 (year ended 2026-04-24) versus $30.12B in FY2021, with operating income of $6.47B, net income of $4.80B, operating cash flow of $7.33B and capex of $1.90B in FY2026. The biggest structural change across the window is the Diabetes exit: MiniMed IPO'd on March 9, 2026 and the Diabetes Operating Unit stopped being a reportable segment in Q4 FY2026, so FY2026 business metrics still include Diabetes and are not clean forward comparables. Revenue is sold through direct reps plus distributors and consignment stock with no customer above 10% of net sales; pricing pressure from tenders, GPOs and competing GLP-1 drug therapies is the recurring commercial drag the filings flag.
- ○ 2. Competitive advantage
The record shows a scaled, consistently profitable device franchise rather than a proven wide moat: revenue rose from $30.12B (FY2021) to $36.36B (FY2026) with operating income up from $4.48B to $6.47B and no loss year, and operating cash flow of $7.33B against $1.90B capex (FY2026). But MDT's own 10-K describes a highly competitive field in more than 150 countries, names price and cost-effectiveness as competitive factors, flags Chinese tender pricing that forces concessions, and admits it has lost market share from time to time. The advantage reads as scale, breadth of product lines and installed clinical relationships — defensible but priced against, not a pricing-power franchise. No source gives market share, gross margin or ROIC, so durability cannot be quantified here.
- ✓ 3. 10-Q takeaways
The quarter ended 2026-07-31 (Q1 FY2027) showed total net sales of $9,756M, up 14% from $8,578M, but roughly $570M of that came from the extra week in the 53-week fiscal year and there was also a foreign-currency tailwind. Cardiovascular led at +20% (EPT +30% on pulsed field ablation), Neuroscience and Medical Surgical each +10%, Diabetes +17%. Cost of products sold was flat as a percent of sales, GAAP diluted EPS was $1.14 versus $0.81 (helped by a $64M minority-investment gain and a lower 16.4% tax rate from an uncertain-tax-position release), non-GAAP EPS was $1.45 versus $1.26, and free cash flow jumped to $1,290M from $584M.
- ✓ 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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