MDLN changes
Pick any two versions below to diff them.
- Price
- $35.96 → $42.16(+17.2%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Nov 4, 2026 → Feb 4, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices Medline for lower profit growth and for the shares that its owners still have to sell. In August 2026, Medline lowered its 2026 Adjusted EBITDA guidance to $3.3 billion to $3.4 billion from $3.5 billion to $3.6 billion, because of inflation from the Middle East conflict, more spending on operations, quality remediation and weak retail sales. added: In Q3 2026, net sales grew 10.4% and Adjusted EBITDA grew 11.8%, but net income fell 1.2% because of inventory cost inflation, higher operating expenses and customer mix. Q3 results also included $81 million of net IEEPA tariff refund benefits, which will not repeat. A fire destroyed its Tracy, California distribution center on June 11, 2026, with added: estimated losses of removed: $336 added: $416 million removed: before insurance. added: through Q3 2026, and insurers paid $100 million of it in Q3. Medline also has three unresolved FDA warning letters, and its private equity owners sold 72.6 million shares in May 2026, so more sales are possible. added: In October 2026, Medline prepaid $750 million of debt, and its board approved a share repurchase program of up to $1 billion. For the gap to close, three things must be true. Medline must reach its removed: new 2026 removed: guidance while organic sales grow 9.0% added: Adjusted EBITDA guidance, which it kept on November 4, 2026, and guide to removed: 10.0%. added: higher profit in 2027 without the help of tariff refunds. Insurers must pay a large part of the added: remaining fire losses. The company must resolve the FDA warning letters without large recalls. The removed: Q3 added: Q4 2026 report removed: on November 4, 2026 and the 2027 guidance in early 2027 give the next evidence. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is that cost inflation and remediation costs continue, so that profit grows much more slowly than sales.
- Risks
- Costs rise faster than prices. Inflation from the Middle East conflict, tariffs and spending on operations made Medline lower its 2026 Adjusted EBITDA guidance in August 2026. Medline has three unresolved FDA warning letters about its quality systems and manufacturing practices. Quality problems can lead to recalls, product holds or more remediation costs. The private equity owners still own large stakes. More sales of shares, such as the sale of 72.6 million shares in May 2026, can put pressure on the share price. Medline has a tax receivable agreement with its pre-IPO owners. The liability was removed: $4.39 added: $4.40 billion at removed: June 27, added: September 26, 2026, and payments under it will use cash for many years.
- Balance sheet
- Cash: $2.3B Debt: $12.6B Net debt: $10.3B Net debt / EBITDA: removed: 2.9× added: 2.5× (medium) Interest cover: removed: 3.2× added: 3.5× Debt due within 12 months: $29M At removed: June 27, added: September 26, 2026, borrowings were $12.58 billion: long-term borrowings of $12.55 billion and current and short-term borrowings of $29 million. Cash was removed: $2.33 added: $2.32 billion, and removed: time deposits added: short-term investments were removed: $350 million. added: $1.29 billion. Net debt, as Medline defines it, was removed: $10.07 added: $9.14 billion, or removed: 2.9 added: 2.5 times Adjusted removed: EBITDA. added: EBITDA, down from 2.9 times at June 27, 2026. Interest cover is operating income divided by net interest expense for the first removed: half added: nine months of 2026. removed: In May added: On October 22, 2026, added: after the quarter end, Medline removed: refinanced added: prepaid $750 million of its term loan due removed: 2030 added: 2033 with added: cash on hand. In October 2026, its board also approved a removed: new term loan due 2033. added: share repurchase program of up to $1 billion. Free cash flow was removed: $920 million added: $1.80 billion in the first removed: half added: nine months of added: 2026, and it includes IEEPA tariff refunds. The tax receivable agreement liability was $4.40 billion at September 26, 2026. As of removed: Jun 27, added: Sep 26, 2026.
- Checkpoints
- Nov 4, 2026: Q3 2026 earnings: new guidance. removed: Pending. added: Passed. Watch: Organic sales growth near 9% to 10% and Adjusted EBITDA on track for $3.3 billion to $3.4 billion pass; another cut to the guidance fails. removed: Q1 added: Outcome: Organic sales grew 10.5%, and Medline raised its 2026 organic sales guidance to 10.0% to 10.5% and kept its Adjusted EBITDA guidance of $3.3 billion to $3.4 billion. Feb 4, 2027 (estimate): Tracy fire insurance and 2027 guidance. Pending. Watch: Insurance recoveries for most of the removed: $336 added: $416 million of added: fire losses added: estimated through Q3 2026 and guidance for higher Adjusted EBITDA in 2027 pass; small recoveries or flat profit guidance fail.
- Recent events
- added: Nov 4, 2026: Medline reported Q3 2026 results. Net sales were $7.9 billion, up 10.4%, and organic sales grew 10.5%. Adjusted EBITDA was $960 million, up 11.8%, and net income fell 1.2% to $318 million. Results included $81 million of net IEEPA tariff refund benefits and $100 million of insurance recoveries for the Tracy fire. Medline raised its 2026 organic sales guidance to 10.0% to 10.5% and kept its Adjusted EBITDA guidance of $3.3 billion to $3.4 billion. It also said that its board approved a share repurchase program of up to $1 billion in October 2026. Oct added: 22, 2026: Medline prepaid $750 million of its term loan due 2033 with cash on hand. It expects a loss of about $21 million on the prepayment in Q4 2026 and lower interest expense after it. Oct 13, 2026: Joseph Baratta told Medline that he will leave its board on December 31, 2026, at the same time as his departure from Blackstone. Medline said that his decision is not the result of a disagreement with the company. Aug 5, 2026: Medline reported Q2 2026 results. Net sales were $7.7 billion, up 11.6%, and Adjusted EBITDA was $1,060 million, up 13.4%. Net income fell 58.3% to $139 million because of losses from the Tracy fire. Results included $243 million of net IEEPA tariff refund benefits. Medline raised its 2026 organic sales guidance to 9.0% to 10.0% and lowered its Adjusted EBITDA guidance to $3.3 billion to $3.4 billion. Jul 7, 2026: Stephen Miller, the Chief Operating Officer, told Medline that he will retire on August 30, 2026, for health reasons. Medline started a search for a successor. Jun 11, 2026: A fire destroyed Medline's distribution center in Tracy, California. All employees left the building safely. Medline estimated losses of $336 million for inventory, fixed assets and other costs, before insurance recoveries, and it leased two other distribution centers in Northern California. May 28, 2026: Funds of Blackstone, Hellman & Friedman and the Abu Dhabi Investment Authority sold 72,554,594 Medline shares at $37.00 per share. Medline received no money from this sale. On the same day, Medline refinanced its term loan due 2030 with a new term loan due May 28, 2033.