Solventum Corp (SOLV)

Price$88.59Cached quoteAs of 2026-09-25 12:37 UTC

AI: Fair-priced

Price checkSolventum’s earnings multiple looks inexpensive, but weak cash flow and restructuring uncertainty limit the margin of safety.

The latest clearly verifiable close before this research timestamp was $86.82 on August 17, 2026. Management raised 2026 adjusted earnings guidance to $7.10-$7.20 per share, putting the stock near 12.1 times the midpoint. That looks cheap for a healthcare-products company, but guided free cash flow—cash left after operations and capital spending—is only $200-$300 million this year because separation and transformation costs remain heavy. The valuation is attractive on earnings, yet current cash conversion is too weak for an undervalued verdict.

Big pictureCore medical and dental businesses are improving, while portfolio reshaping makes reported growth unusually difficult to interpret.

Revenue was $8.33 billion in 2025, only modestly above 2024, but second-quarter 2026 organic sales rose 9.5%. That headline growth included about $125 million of customer orders pulled forward before technology-system changes, which management expects mostly to reverse in the third quarter. Excluding divestiture effects, MedSurg and Dental showed encouraging underlying momentum. Healthcare demand is relatively defensive, but Solventum's current results are less comparable than normal because it sold Purification and Filtration and is now preparing to separate Health Information Systems.

Business strengthDebt has fallen sharply and buybacks reduce dilution, but cash generation remains far below historical levels.

Solventum used proceeds from its $4.0 billion Purification and Filtration sale to strengthen the balance sheet, helping debt fall from $8.01 billion at year-end 2024 to $5.08 billion by June 2026. Cash was $403 million, leaving net debt near $4.7 billion. The company also spent $355 million on repurchases during the first half, reducing shares to about 170.1 million. The concern is cash conversion: first-half free cash flow was negative $129 million despite solid adjusted earnings, so debt reduction still depends on normalization.

What could change the storySeparating the software business could unlock value, while losing its high margins could weaken the remaining company.

The bull case centers on faster operating improvement and the planned separation of Health Information Systems, which generates about $1.4 billion of annual sales and had a roughly 40% segment operating margin in the first half. A standalone software business could command a higher valuation while MedSurg and Dental become easier to evaluate. The bear case is that Solventum removes its highest-margin segment while transformation costs and weak cash conversion persist. Today's price assumes adjusted earnings are real and eventually translate into much stronger cash flow.

AI: News

Guidance raised sharplySecond-quarter results beat expectations and management lifted its full-year earnings outlook well above the previous range.

On August 5, 2026, Solventum reported $2.21 billion of revenue and $2.55 of adjusted earnings per share, with organic sales up 9.5%. Management raised full-year adjusted earnings guidance to $7.10-$7.20 from $6.40-$6.60 and increased free-cash-flow guidance to $200-$300 million. The following day shares fell 5.2% to $82.96 despite the stronger outlook. That reaction may reflect concerns about temporary advance orders, cash conversion and portfolio complexity rather than weak headline results alone.

Software separation announcedSolventum plans to separate its healthcare software business, potentially revealing value but removing a highly profitable segment.

Also on August 5, 2026, Solventum announced plans to separate its Health Information Systems business, which produces about $1.4 billion in annual sales and serves more than 75% of U.S. hospitals. Management is considering a standalone company, combination with another operator or another structure, targeting completion within 12 to 18 months. The business carries materially higher margins than the rest of Solventum, so any separation could unlock valuation upside while also reducing the profitability of the remaining company.

First-quarter cash weaknessEarnings beat expectations, but negative cash flow reminded investors that the transformation is still consuming substantial resources.

On May 5, 2026, Solventum reported adjusted earnings of $1.48 per share versus about $1.35 expected, while organic sales grew 2.1%. However, operating cash flow was negative $189 million and free cash flow was negative $273 million. Shares fell about 2.8% in after-hours trading according to Zacks. The quarter mattered because it highlighted the central valuation question: Solventum can report improving adjusted profit while separation, restructuring and working-capital demands delay conversion of those profits into cash.

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Revenue

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2023

2024

2025

Net income

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2023

2024

2025

Free cash flow

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Total cash / debt

CashTotal debt

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2025

Financial statements

	2025	2024	2023	2022
Revenue	$8.32B	$8.25B	$8.20B	$8.13B
Gross profit	$4.45B	$4.59B	$4.69B	$4.70B
Gross margin	53.47%	55.65%	57.25%	57.75%
Research & development	$739.0M	$775.0M	$758.0M	$767.0M
Operating expenses	$2.27B	$3.56B	$3.00B	$3.00B
Operating income	$2.18B	$1.04B	$1.69B	$1.69B
Operating margin	26.20%	12.55%	20.64%	20.82%
EBITDA	$2.67B	$1.59B	$2.25B	$2.27B
EBITDA margin	32.07%	19.28%	27.49%	27.93%
Net income	$1.56B	$479.0M	$1.35B	$1.34B
Net profit margin	18.69%	5.80%	16.42%	16.52%
Basic EPSper basic share	$8.94	$2.77	$7.79	$7.78
Diluted EPSper diluted share	$8.88	$2.76	$7.79	$7.78

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

≈15.03%of listed shares

3M CO25.57M shares · Aug 15, 2025

View holders

Top 20 reported holders of SOLV
Holder	% owned
3M CO	≈15.03%25.57M shares
Independent Franchise Partners LLP	9.51%16.17M shares
BlackRock, Inc.	5.74%9.76M shares
VANGUARD CAPITAL MANAGEMENT LLC	5.66%9.62M shares
TRIAN FUND MANAGEMENT, L.P.	4.84%8.24M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	3.72%6.33M shares
Davis Selected Advisers	3.71%6.31M shares
STATE STREET CORP	3.31%5.64M shares
GEODE CAPITAL MANAGEMENT, LLC	2.89%4.91M shares
Boston Partners	2.37%4.04M shares
Invesco Ltd.	1.95%3.31M shares
FMR LLC	1.22%2.08M shares
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO	1.22%2.07M shares
Diamond Hill Capital Management, LLC (Investment Advisor)	1.14%1.95M shares
DIMENSIONAL FUND ADVISORS LP	1.07%1.82M shares
Madison Avenue Partners, LP	1.02%1.74M shares
NORGES BANK	1.01%1.71M shares
MORGAN STANLEY	0.90%1.53M shares
CHARLES SCHWAB INVESTMENT MANAGEMENT INC	0.90%1.52M shares
NORTHERN TRUST CORP	0.82%1.39M shares

Percentages use 170.11M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 4 ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$100.3K disclosed value

Sells (SEC code S)1$646.36M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Mar 10, 2026Form 4	Wendell Amy McBrideDirector	BuyCommon Stock	1.5K	$68.03	$100.3K	5.0K
Aug 15, 2025Form 4	3M COTenPercentOwner	SellCommon Stock	8.80M	$73.45	$646.36M	25.57M

Review ownership filings at SEC.gov ↗

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Solventum Corp (SOLV)

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