Solventum Corporation SOLV
Solventum's FY2025 results confirm the post-spinoff turnaround is gaining traction: operating income recovered to $2.18B from $1.04B in FY2024, EPS jumped to $8.88 from $2.76, and total debt was cut from $8.01B to $5.04B. The stock trades at a 62% discount to the peer median P/E (10.7x vs 28.3x) and 43% below peer median EV/EBITDA (7.7x vs 13.6x), while the announced spinoff of the $1.4B Health Information Systems business provides a clear sum-of-the-parts catalyst.
The main caveat is that free cash flow turned negative in FY2025 at -$10M versus $805M in FY2024, and insiders have been net sellers of 8.5M shares over 24 months, but the combination of extreme valuation compression, deleveraging, and portfolio simplification keeps the risk/reward favorable.
What could go wrong
- FCF deterioration. Free cash flow turned negative at -$10M in FY2025 versus $805M in FY2024, with operating cash flow collapsing to $369M from $1.185B; if this is structural rather than transitional, the equity story weakens significantly.
- Insider net selling. Over the past 24 months, insiders have net sold 8.45M shares worth $656M, with no open-market purchases; recent transactions are RSU vestings and grants, not discretionary buys.
- Gross margin compression. Gross margin has declined steadily from 60.25% in FY2021 to 53.47% in FY2025, suggesting persistent cost or mix headwinds that could limit operating leverage.
- Low revenue growth. Revenue growth has been sub-1% for three consecutive years (0.86% in FY2025, 0.70% in FY2024, 0.82% in FY2023), meaning profit recovery relies entirely on margin expansion rather than top-line momentum.
What would change my mind
Where this comes from: FMP annual fundamentals · FMP annual fundamentals · FMP annual fundamentals · peer_relative composite. Orin's read on SOLV; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All SOLV filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $742.6M | 0.0% of fund |
| Trian Fund Management, L.P | $635.5M | 15.0% of fund |
| Vanguard Portfolio Management | $488.3M | 0.0% of fund |
| State Street | $435.1M | 0.0% of fund |
| Geode Capital Management | $378.3M | 0.0% of fund |
| Invesco | $255.4M | 0.0% of fund |
77 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 175 Form 4 filings, net −$658.4M. Of the 50 on hand, none was an open-market trade— the rest are grants, option exercises and tax withholding.
Ask Orin about SOLV
Orin answers questions about SOLV from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 10.8× | 10.3× | 26.4× |
| EV/EBITDA | 7.8× | 7.0× | — |
| P/S | 1.84× | 1.69× | — |
| P/B | 3.2× | 1.2× | — |
Its P/E sits 80th percentile of its own last 5 years (−0.32σ from its own mean).
What Wall Street published
$91
$43 – $113 · +3% against today's price
- 9 buy or overweight
- 2 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| SOLVSolventum Corporation | $15B | 10.8× | 7.8× | 54.7% | 17.3% | 29% |
| ALGNAlign Technology, Inc. | $11B | 25.7× | 12.2× | 66.5% | 10.0% | 10% |
| RVTYRevvity, Inc. | $16B | 67.7× | 23.7× | 52.1% | 8.2% | 3% |
| UHSUniversal Health Services, Inc. | $11B | 7.4× | 5.7× | 90.7% | 8.4% | 21% |
The median is of the 3 peers listed above and nothing else — check it against the column. This company trades 58.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $142 | $81.15 · +75% | 2026-06-10 |
| Levered DCF | $99 | $81.15 · +22% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.