Tweet
The Sonic Healthcare Ltd (ASX:SHL) share price is down -10.05% since the beginning of 2025. So, how can you put a value on the SHL share price?
SHL share price in focus
Sonic Healthcare was listed in April 1987. It is now one of the world’s biggest pathology businesses with operations in Australia, New Zealand, Europe and North America.
It offers a number of different services including laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine and corporate medical services.
Sonic Healthcare looks to act in the best interests of its doctors and their patients. It aims to provide medical excellence as well as being a highly desirable place to work. The key metrics
If you’ve ever tried reading a company’s income statement on the annual report, you’ll know just how complex it can get. While there are any number of ways you could slice up the statement, three key figures are revenue, gross margin, and profit.
Revenue is important for obvious reasons – everything else (profit, margins, return on equity etc.) is downstream of a company’s ability to generate sales and revenue. What we’re looking for is not so much the absolute number, but the trend. SHL last reported an annual revenue of $8,967m with a compound annual growth rate (CAGR) over the last 3 years of 0.8% per year.
The next thing we’ll want to consider is the gross margin. The gross margin tells us how profitable the core products/services are – before you take into account all the overhead costs, how much money does the company make from selling $100 worth of goods and services? SHL’s latest reported gross margin was 32.8%.
Finally, we get to profit, the real headline number. Last financial year Sonic Healthcare Ltd reported a profit of $511m. That compares to 3 years ago when they made a profit of $1,315m, representing a CAGR of -27.0%. Financial health of SHL shares
Next, we could consider the capital health of the company. What we’re trying to work out is whether the company is generating a reasonable return on their equity (the total shareholder value) and whether they have a good safety buffer. One important measure to consider is net debt. This is simply the total debt minus the company’s cash holdings.
In the case of SHL, the current net debt sits at $3,871m. A high number here means that a company has a lot of debt which potentially means higher interest payments, greater instability, and higher sensitivity to interest rates. A negative value on the other hand indicates the company has more cash than debt, which can be seen as good (a big safety buffer) or bad (inefficient capital allocation).
A metric that might be more valuable to us is the debt/equity percentage. This tells us how much debt the company has relative to shareholder ownership. In other words, how leveraged is the company? Sonic Healthcare Ltd has a debt/equity ratio of 55.9%, which means they have more equity than debt.
Finally, we can look at the return on equity (ROE). The ROE tells us how much profit a company is generating as a percentage of its total equity – high numbers indicate the company is allocating capital efficiently and generating value, while a low number suggests that company growth may be starting to slow. SHL generated an ROE of 6.8% in FY24. What to make of SHL shares?
As a growth company, one way to put a general prediction on the SHL share price could be to compare its price-to-sales multiple over time. Currently, Sonic Healthcare Ltd shares have a price-sales ratio of 1.36x, compared to its 5-year average of 1.94x, meaning its shares are trading below their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of SHL, revenue has been growing over the last 3 years. Please keep in mind that context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric.
The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! Both of these models would be a better way to value the SHL share price. RBA rates are now down, here’s what I’d do next…
With interest rates down, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income (+ franking!) from the ASX’s best shares, LICs, or ETFs… it’s like magic.
So how do the best investors do it?
Chief Investment Officer Owen Rask has released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.
You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account. (Psst. By creating a free Rask account, you’ll also get access to our 24/7 investor community, 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)
Access all reports now
Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #563 907.
SHL share price in focus
Sonic Healthcare was listed in April 1987. It is now one of the world’s biggest pathology businesses with operations in Australia, New Zealand, Europe and North America.
It offers a number of different services including laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine and corporate medical services.
Sonic Healthcare looks to act in the best interests of its doctors and their patients. It aims to provide medical excellence as well as being a highly desirable place to work. The key metrics
If you’ve ever tried reading a company’s income statement on the annual report, you’ll know just how complex it can get. While there are any number of ways you could slice up the statement, three key figures are revenue, gross margin, and profit.
Revenue is important for obvious reasons – everything else (profit, margins, return on equity etc.) is downstream of a company’s ability to generate sales and revenue. What we’re looking for is not so much the absolute number, but the trend. SHL last reported an annual revenue of $8,967m with a compound annual growth rate (CAGR) over the last 3 years of 0.8% per year.
The next thing we’ll want to consider is the gross margin. The gross margin tells us how profitable the core products/services are – before you take into account all the overhead costs, how much money does the company make from selling $100 worth of goods and services? SHL’s latest reported gross margin was 32.8%.
Finally, we get to profit, the real headline number. Last financial year Sonic Healthcare Ltd reported a profit of $511m. That compares to 3 years ago when they made a profit of $1,315m, representing a CAGR of -27.0%. Financial health of SHL shares
Next, we could consider the capital health of the company. What we’re trying to work out is whether the company is generating a reasonable return on their equity (the total shareholder value) and whether they have a good safety buffer. One important measure to consider is net debt. This is simply the total debt minus the company’s cash holdings.
In the case of SHL, the current net debt sits at $3,871m. A high number here means that a company has a lot of debt which potentially means higher interest payments, greater instability, and higher sensitivity to interest rates. A negative value on the other hand indicates the company has more cash than debt, which can be seen as good (a big safety buffer) or bad (inefficient capital allocation).
A metric that might be more valuable to us is the debt/equity percentage. This tells us how much debt the company has relative to shareholder ownership. In other words, how leveraged is the company? Sonic Healthcare Ltd has a debt/equity ratio of 55.9%, which means they have more equity than debt.
Finally, we can look at the return on equity (ROE). The ROE tells us how much profit a company is generating as a percentage of its total equity – high numbers indicate the company is allocating capital efficiently and generating value, while a low number suggests that company growth may be starting to slow. SHL generated an ROE of 6.8% in FY24. What to make of SHL shares?
As a growth company, one way to put a general prediction on the SHL share price could be to compare its price-to-sales multiple over time. Currently, Sonic Healthcare Ltd shares have a price-sales ratio of 1.36x, compared to its 5-year average of 1.94x, meaning its shares are trading below their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of SHL, revenue has been growing over the last 3 years. Please keep in mind that context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric.
The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! Both of these models would be a better way to value the SHL share price. RBA rates are now down, here’s what I’d do next…
With interest rates down, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income (+ franking!) from the ASX’s best shares, LICs, or ETFs… it’s like magic.
So how do the best investors do it?
Chief Investment Officer Owen Rask has released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.
You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account. (Psst. By creating a free Rask account, you’ll also get access to our 24/7 investor community, 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)
Access all reports now
Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #563 907.