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STMN

Straumann Holding AG

CHF 94.16 15B market cap February 21, 2026
Straumann Holding AG STMN BUFFETT / MUNGER / KLARMAN SUMMARY
1 SNAPSHOT
PriceCHF 94.16
Market Cap15B
2 BUSINESS

Straumann is the world's best dental implant company with a wide moat built on surgeon switching costs, premium brand heritage, and global scale. The ~35% market share, 70% gross margin, and 25% EBIT margin reflect genuine competitive advantages. However, at 42x P/E and a FCF yield of just 2.2%, the stock offers no margin of safety even after a 30% drawdown from highs. The expected 5-year return of ~16% (3% annualized) is insufficient for the risks taken. Wait for CHF 62-70, which could come from a broader market correction, China VBP contagion fears, or growth deceleration.

3 MOAT WIDE

Surgeon training lock-in (100-300hr retraining cost), proprietary prosthetic connections creating 20yr recurring revenue, 40yr clinical evidence base with 15,000+ studies, Roxolid/SLActive proprietary technology, multi-brand strategy covering premium-to-value segments

4 MANAGEMENT
CEO: Guillaume Daniellot

Good - revenue grown from CHF 1.6B to CHF 2.6B under his leadership. Neodent acquisition excellent. DrSmile divested (admitted mistake). Dividends growing 10% CAGR. Heavy capex cycle for capacity expansion.

5 ECONOMICS
25.2% Op Margin
25.1% ROIC
17% ROE
42.22x P/E
0.29B FCF
1.8% Debt/EBITDA
6 VALUATION
FCF Yield2.2%
DCF Range72 - 100

Overvalued by 7% vs weighted IV of CHF 88

7 MUNGER INVERSION
Kill Event Severity P() E[Loss]
China VBP contagion to Western markets could collapse implant pricing globally HIGH - -
ClearCorrect failing to scale against Invisalign dominance (70%+ share) MED - -
8 KLARMAN LENS
Downside Case

China VBP contagion to Western markets could collapse implant pricing globally

Why Market Right

China VBP model potentially spreading to other markets; CHF strength structurally compressing reported results; ClearCorrect capital burn without meaningful market share gain

Catalysts

Core EBIT margin expansion 30-60bps guided for 2026; LATAM organic growth 18.3% -- fastest-growing region; Global implant penetration only ~5% of edentulous patients; Aging population demographics (65+ growing rapidly)

9 VERDICT WAIT
A Quality Strong - essentially net cash (CHF 38M net debt), 2.21x current ratio, 8.88 Altman Z-Score
Strong BuyCHF 62
BuyCHF 70
Fair ValueCHF 100

Strong Buy below CHF 62, Accumulate below CHF 70. Current price CHF 94 offers no margin of safety.

🧠 ULTRATHINK Deep Philosophical Analysis

STMN - Ultrathink Analysis

The Core Question

The surface-level question -- "Is Straumann a great business?" -- is trivially answered. Thirty-five percent global market share, 70% gross margins, negligible debt, and 40 years of clinical evidence. Of course it is a great business. The real question is far more unsettling:

When a government in Beijing can decree that your product's price drops 80% overnight, how durable is the "premium" in "premium dental implants" -- and what happens when the rest of the world takes notes?

This is the tension at the heart of Straumann. The company has built perhaps the most complete moat in medical devices outside of orthopedics. Surgeons spend hundreds of hours learning Straumann's system. Every implant placed creates two decades of proprietary prosthetic revenue. The clinical evidence base is unassailable. And yet, China proved in 2023 that all of these advantages can be rendered irrelevant by a single policy decision.

Moat Meditation: The Surgeon's Hands

Let me think carefully about what actually constitutes Straumann's competitive advantage, because it is more nuanced than the standard "switching costs" narrative suggests.

When a dentist places an implant, they are performing a surgical procedure that demands muscle memory. The diameter of the drill, the speed of rotation, the torque applied to the implant, the angle of insertion -- all of these are system-specific. A Straumann-trained dentist does not merely "prefer" Straumann; their hands are trained for Straumann. This is not a cognitive preference that can be overcome by a 20% discount from a competitor. It is a neuromuscular habit formed over years of practice. This is switching cost at its deepest level.

But here is the inversion question Munger would demand: Does this switching cost protect against price competition, or merely against brand competition?

The distinction matters enormously. China's VBP did not ask dentists to switch implant systems. It simply told Straumann: "You can keep selling your implants, but the government will only reimburse CHF 50 instead of CHF 500." The surgeon's hands still placed Straumann implants. The switching cost was intact. But the price collapsed anyway.

This reveals a subtle truth about Straumann's moat: the switching cost protects market share but may not protect pricing power in a government-payer system. In private-pay markets (the US, much of Europe), where the dentist sets the price and the patient pays out-of-pocket, Straumann's premium is sustainable because the dentist wants the brand prestige and the patient trusts the premium. But in single-payer or government-procurement systems, the switching cost becomes irrelevant to pricing.

The question then becomes: what percentage of the global dental implant market will shift from private-pay to government-procurement? If the answer is "only China," then Straumann's moat is dented but intact. If the answer is "China first, then Germany, then South Korea, then..." -- well, that is a very different investment thesis.

The Owner's Mindset: Twenty Years from Now

Would Buffett hold Straumann for twenty years? Let me think through this honestly.

Arguments for yes:

  • The aging population megatrend is among the most certain secular forces in investing. The number of people over 65 will nearly double by 2050. Older people lose teeth. Implants are the best solution. The math is compelling and non-speculative.
  • Only 5% of edentulous patients globally receive implants. This is a market at the early-to-middle stages of a long adoption curve, not a mature market growing at GDP.
  • Straumann's multi-brand strategy (Straumann premium, Neodent value, Anthogyr economy) means the company can capture volume regardless of which price segment grows fastest.
  • The digital dentistry transformation (intraoral scanners, AI treatment planning, 3D-printed prosthetics) is integrating the entire workflow into ecosystems. Straumann is building this ecosystem. Once dentists are inside it, leaving becomes exponentially harder.

Arguments for no:

  • The business is priced for perfection. At 42x earnings, even modest disappointments cause severe drawdowns. Buffett does not buy 42x P/E stocks.
  • ClearCorrect orthodontics is a significant capital allocation question. The aligner market is dominated by Align Technology, which has a massive data moat (16M+ treated cases feeding AI algorithms). Straumann is the distant #3. This could become the "diworsification" that Munger warns about.
  • The Swiss franc problem is structural, not cyclical. Switzerland perpetually appreciates against most currencies. A business that earns 95%+ of revenue outside Switzerland but reports in CHF faces permanent translation headwinds. Over 20 years, this is not trivial.

My honest assessment: Buffett would admire the business but would not pay this price. At CHF 60, he might act. At CHF 94, he would wait. The quality is not in question; only the price.

Risk Inversion: What Destroys This Business?

Let me think about destruction scenarios, because that is how Munger approaches every investment.

Scenario 1: The Chinese Model Goes Global (15% probability, catastrophic impact) China's VBP cut implant prices by 80%. If Germany implements a similar procurement model for dental implants, followed by the UK National Health Service, then France, Italy, Spain -- suddenly 42% of Straumann's revenue (EMEA) faces 50-80% price compression. Revenue does not decline (surgeons still use the system), but margins collapse from 25% to 10%.

This is the existential risk. It is unlikely but not impossible. European healthcare systems are under fiscal pressure. Dental implants are expensive and elective. A populist government could easily target them.

Scenario 2: Bioprinted Teeth Replace Implants (5% probability, 20-year timeline) Researchers have demonstrated bioprinted tooth structures using stem cells. If this technology matures, it could make titanium implants obsolete. However, the timeline is at least 15-20 years, regulatory approval would take another 5-10 years, and the transition would be gradual. Straumann has time to adapt or acquire.

Scenario 3: A Cheaper-Is-Better Value Shift (20% probability, moderate impact) What if the dental profession decides that value implants (Osstem, Dentium, MegaGen) are "good enough"? Korean manufacturers already offer implants at 40-60% of Straumann's price with credible clinical data. If younger dentists, trained during an economic downturn, overwhelmingly adopt value brands, Straumann's premium positioning erodes generationally. The Neodent strategy mitigates this, but it cannibalizes the core premium business.

Valuation Philosophy: The Price of Wonderful

Here is where I must be brutally honest.

Straumann is exactly the kind of business that value investors fall in love with and then overpay for. The clinical heritage, the surgeon loyalty, the aging population tailwind, the net cash balance sheet -- everything screams "quality." And quality deserves a premium.

But how much premium? The market is currently pricing Straumann at 42x trailing earnings and 7x book value. Even using "core" earnings (which strip out one-time items), the P/E is still ~33x. For a business growing organically at 9% and converting perhaps 11% of revenue to free cash flow, the implied return is:

FCF yield + growth = 2.2% + 9% = 11.2% pre-multiple-compression

But that 11.2% assumes the multiple stays at 42x forever. If it contracts to a more reasonable 25x over 5 years (still a premium multiple), the annualized return drops to about 3%. Three percent. For a stock with a 1.51 beta and meaningful single-country policy risk.

Charlie Munger said it best: "Over the long term, it is hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for 40 years, you are not going to make much different than a 6% return -- even if you originally buy it at a huge discount."

Straumann earns 17% ROE and 25% ROIC. Those are excellent numbers. But at 42x earnings, the investor's return is far lower than the business's return. The gap between business quality and investor return is the price you pay for the privilege of owning quality.

The Patient Investor's Path

The right answer with Straumann is the hardest one: do nothing and wait.

This is a CHF 62-70 stock for the value investor. That price implies 22-25x earnings, which properly compensates for the growth, quality, and risk. It offers a genuine margin of safety against the China VBP contagion scenario and the currency headwind problem.

How does the stock get to CHF 62-70?

  • A broad market correction (medtech derating has happened before; 2022 saw STMN go from CHF 190 to CHF 83)
  • A bad quarterly report (organic growth dipping below 5% would spook the market)
  • China VBP extension to more product categories creating fear
  • ClearCorrect impairment charge

The irony of Straumann is that the best time to buy will be when headlines are most negative -- when everyone is worried about government price controls, when organic growth disappoints, when the Swiss franc is crushing reported earnings. That is precisely when the 42x multiple compresses to 22x, and the wonderful business becomes a wonderful investment.

Until then, patience. Write the ticker on a card. Put it in a drawer. Check the price monthly. Act only when the margin of safety is real.

As Buffett says: "The stock market is a device for transferring money from the impatient to the patient." With Straumann, patience will eventually be rewarded. The question is whether you have the discipline to wait.

Executive Summary

Straumann is the world's #1 dental implant company with 35% global implant market share, operating in a structurally growing industry driven by aging populations, rising dental aesthetics demand, and low global implant penetration rates (5% of edentulous patients receive implants). The company has compounded revenue at ~14% CAGR over the last decade and maintains a 70% gross margin, 25% EBIT margin, and 17% ROE. However, the stock trades at 42x trailing P/E -- expensive even after a -30% drawdown from its 52-week high.

Verdict: WAIT - Exceptional quality, but insufficient margin of safety at current prices

Metric Value Assessment
Quality Grade A ROE 17-21%, 70% gross margin, net cash
Moat Wide Switching costs + brand + scale + R&D
Valuation Overvalued P/E 42x, EV/EBITDA 20x, P/B 7x
Entry Price CHF 60-75 Need 30-40% pullback for margin of safety

1. Business Overview

What They Do

Straumann designs, manufactures, and distributes dental implant systems, prosthetics, biomaterials, digital equipment, and clear aligners globally. Founded in 1954 in Basel, Switzerland, the company has transformed from a pure premium implant maker to a multi-brand oral care platform.

Segment Estimated % Revenue Products
Premium Implants ~45% Straumann BLT/BLX, SLActive surface, Roxolid material
Value Implants ~15% Neodent (challenger brand), Anthogyr, Medentika
Orthodontics ~15% ClearCorrect aligners (B2B focus)
Digital Solutions ~15% CARES digital prosthetics, intraoral scanners
Biomaterials & Other ~10% Bone grafts, membranes, prosthetic components

Revenue Diversification Over Time

In 2013, nearly 95% of revenue came from Straumann-branded premium implants. By 2024, the revenue mix had significantly diversified: value implants, digital equipment, and orthodontics accounted for approximately 40% of total revenue. This is a positive trend -- the company has reduced concentration risk while maintaining premium positioning.

Revenue by Region (FY 2025, CHF millions)

Region Revenue % of Total Organic Growth
EMEA 1,084 41.6% 11.2%
North America 688 26.4% 4.2%
APAC 600 23.0% 7.3%
LATAM 234 9.0% 18.3%
Total 2,605 100% 8.9%

Market Position

Company Global Implant Share Notes
Straumann ~35% #1 globally, ~50% premium segment
Nobel Biocare (Envista) ~18% #2, strong in premium
Dentsply Sirona ~12% #3, broad dental portfolio
Osstem Implant ~10% South Korean, value segment leader
Zimmer Biomet ~8% Orthopedics-focused
Others ~17% Fragmented rest of market

2. Financial Analysis

5-Year Income Statement Summary (CHF millions)

Year Revenue Growth Gross Margin EBIT (Core) EBIT Margin Net Income (Core) Net Margin EPS
2020 ~1,460 -9% ~72% ~290 ~20% ~230 ~16% ~1.40
2021 2,022 +38% ~74% 537 26.6% ~420 ~21% ~2.60
2022 2,321 +15% ~73% 535 23.1% ~400 ~17% ~2.50
2023 2,277 -2% ~73% 598 26.3% 441 19.4% ~2.75
2024 2,504 +10% 71.4% 650 26.0% 502 (core) 20.0% 2.87
2025 2,605 +4% 70.1% 656 25.2% 478 (core) 18.3% 2.24

Notes:

  • 2020 severely impacted by COVID (dental clinics shut)
  • 2022 included CHF headwinds and supply chain issues
  • 2024 reported net income CHF 439M (affected by DrSmile divestiture)
  • 2025 reported net income CHF 356M (one-off items); core net income CHF 478M
  • Revenue growth in constant currency was 10% in FY 2025

Profitability Metrics (FY 2025)

Metric Value Assessment
Gross Margin (Core) 70.1% Exceptional -- premium pricing power
EBITDA Margin (Core) 30.6% Strong, improving +50bps YoY
EBIT Margin (Core) 25.2% (26.5% CC) Healthy, FX headwinds
Net Margin (Core) 18.3% Good but compressed by FX
ROE 17.0% Passes Buffett 15% test
ROIC 25.1% Strong capital efficiency
FCF Margin 11.1% Depressed by heavy capex cycle

Balance Sheet (As of End 2025)

Metric Value Assessment
Total Assets CHF ~3.6B
Total Equity CHF ~2.16B
Cash & Equivalents CHF ~375M
Total Debt CHF ~414M Modest leverage
Net Debt CHF ~38M Essentially net cash
Debt/Equity 0.19 Conservative
Current Ratio 2.21 Strong liquidity
Altman Z-Score 8.88 Very safe (>3.0 = safe zone)

Cash Flow (FY 2025)

Metric Value
Operating Cash Flow CHF ~504M
Capital Expenditure CHF 224M (+33% YoY)
Free Cash Flow CHF 290M
FCF / Revenue 11.1%
FCF / Share CHF 2.06

Note: Capex is elevated due to manufacturing capacity expansion. Historical FCF margin was 13-15%.

DuPont ROE Decomposition

ROE = Net Margin x Asset Turnover x Equity Multiplier
17% = 13.7% x 0.73 x 1.67

Key observations:
- Net margin is the primary driver (premium pricing)
- Asset turnover is moderate (capital-light model)
- Low leverage (1.67x equity multiplier) -- ROE is quality-driven, not debt-driven

Graham Criteria Check

# Criterion Test Result
1 Adequate Size Revenue CHF 2.6B PASS
2 Strong Financial Condition Current Ratio 2.21, Net Debt ~0 PASS
3 Earnings Stability Positive earnings every year (2020 dip but profitable) PASS
4 Dividend Record Regular dividends, but only ~10+ years at current level PARTIAL
5 Earnings Growth Revenue 14% CAGR over 10 years PASS
6 Moderate P/E P/E 42x >> 15x limit FAIL
7 Moderate P/B P/B 6.94 >> 1.5x; P/E x P/B = 293 >> 22.5 FAIL

Graham Number = sqrt(22.5 x 2.23 x 13.55) = sqrt(680) = CHF 26.1

The stock at CHF 94 trades at 3.6x the Graham Number. This is emphatically not a Graham-style value investment. The thesis must rest entirely on quality and growth.

Owner Earnings Calculation

Owner Earnings = Net Income + D&A - Maintenance CapEx - Delta Working Capital
              = CHF 356M + CHF 141M - CHF 140M - CHF 20M
              = CHF 337M

Owner Earnings per Share = CHF 337M / 159.45M shares = CHF 2.11

Conservative Value (10x OE) = CHF 21.10
Fair Value (15x OE) = CHF 31.65
Premium Value (20x OE) = CHF 42.20

Using Core Net Income (CHF 478M):
Core Owner Earnings = CHF 478M + CHF 141M - CHF 140M - CHF 20M = CHF 459M
Core OE / Share = CHF 2.88

Conservative Value (10x) = CHF 28.80
Fair Value (15x) = CHF 43.20
Premium Value (20x) = CHF 57.60
Growth-Adjusted (25x for high-quality grower) = CHF 72.00

Even at a generous 25x multiple on core owner earnings, fair value is only CHF 72 -- 24% below current price.

3. Moat Analysis

Straumann possesses a Wide Moat built on four reinforcing sources:

3.1 Switching Costs (Primary Moat -- STRONG)

The dental implant system lock-in is among the strongest in medical devices:

  • Surgeon training: Dentists invest 100-300+ hours learning a specific implant system. Each system has unique drilling protocols, torque settings, and prosthetic connections. Switching means retraining, with productivity losses during transition.
  • Prosthetic compatibility: Each implant system has proprietary connections. A patient with a Straumann implant needs Straumann-compatible abutments and crowns. This creates 20+ year recurring revenue per implant placed.
  • Digital workflow integration: Straumann's CARES digital ecosystem integrates with scanners, CAD/CAM, and treatment planning. Switching systems disrupts the entire digital workflow.
  • Clinical evidence base: Straumann has 40+ years of published clinical data. Dentists are conservative; they trust what has evidence. The cost of switching to a less-proven system = potential patient litigation risk.

Switching Cost Calculation:

  • Cost to switch: ~CHF 50,000-100,000 per practice (training, equipment, digital integration)
  • Annual customer value: ~CHF 20,000-40,000 per year
  • Switching cost / annual value = 1.5-5x = HIGH switching costs

3.2 Brand & Reputation (STRONG)

  • 40+ years of clinical heritage with 15,000+ published clinical studies
  • Premium positioning allows 20-40% price premium over value brands
  • "Nobody gets fired for choosing Straumann" mentality among dentists
  • Proprietary technologies: Roxolid (titanium-zirconium alloy), SLActive (hydrophilic surface for faster healing)

3.3 Scale & Distribution (MODERATE-STRONG)

  • Operations in 100+ countries
  • Direct distribution in 28 countries
  • 11,821 employees
  • R&D spend CHF 200M+ annually (8% of revenue)
  • Multi-brand strategy (Straumann premium, Neodent value, Anthogyr economy) captures all price segments

3.4 R&D & Innovation (MODERATE)

  • CHF 200M+ annual R&D investment
  • First-mover in digital dentistry integration
  • Roxolid and SLActive remain differentiated surface technologies
  • ClearCorrect represents platform expansion into orthodontics

Moat Durability Assessment

Threat Severity (1-5) Timeline Company Mitigation
Chinese value implant competition 3 5-10 years Multi-brand strategy covers value segment via Neodent
Align Technology (Invisalign) dominance in aligners 4 Ongoing ClearCorrect is #3; B2B focus differentiates
AI-driven implant planning reducing switching costs 2 10+ years Investing in digital workflow
Regulatory changes 1 Low probability Strong regulatory compliance team
Technology disruption (bioprinted teeth, stem cells) 2 15-20+ years Too early to displace implants

10-year moat trajectory: STABLE to WIDENING -- The multi-brand strategy is expanding total addressable market while core premium switching costs remain intact.

4. Risk Analysis (Inversion)

Top 3 Ways This Could Fail Permanently

1. China Volume-Based Procurement (VBP) Contagion China implemented a volume-based procurement system in 2023 that slashed implant prices by 50-80%. If this model spreads to Europe and North America, Straumann's premium pricing power is destroyed. The company has adapted in China by focusing on value brands, but global VBP contagion would devastate margins.

Probability: 15% | Impact: -40% revenue, -60% earnings Mitigation: VBP is politically driven; Western markets have different healthcare structures

2. ClearCorrect Fails to Scale Against Invisalign Align Technology (Invisalign) has 70%+ market share in clear aligners with a massive data moat (16M+ cases). ClearCorrect is #3 with perhaps 5-8% share. If ClearCorrect continues to burn cash without gaining meaningful share, it represents a significant capital allocation mistake. The DrSmile divestiture in 2024 already acknowledged failure in the direct-to-consumer aligner business.

Probability: 35% | Impact: CHF 200-300M writedown, but contained Mitigation: B2B focus is more defensible; leverages dentist relationships

3. Currency Headwinds Structurally Compress Returns As a Swiss-domiciled company reporting in CHF, a strengthening Swiss franc permanently erodes reported results. In FY 2025, FX headwinds reduced revenue by >CHF 100M and compressed margins by 130bps. If the Swiss franc continues to strengthen (which it structurally tends to do), CHF-based returns will perpetually lag underlying business performance.

Probability: 60% | Impact: 2-4% annual return headwind Mitigation: This is the "Swiss quality tax" -- partially offset by pricing power

Bear Case (3 sentences)

Straumann trades at 42x earnings for a business growing at 9% organically in a mature industry. China VBP has demonstrated that government intervention can collapse implant pricing overnight. With reported (not core) net margin declining from 20% to 14% and free cash flow depressed by heavy capex, the quality premium is unjustified at current prices.

What Would Make Me Sell Immediately (Non-Price)

  1. Management announces major acquisition at >10x revenue (empire building)
  2. China VBP model adopted by German or US healthcare systems
  3. ROE drops below 12% for two consecutive years
  4. CEO Guillaume Daniellot departs without strong succession plan

5. Management & Capital Allocation

CEO: Guillaume Daniellot

  • Tenure: CEO since January 2020 (6 years), at Straumann since 2007
  • Background: 13+ years at Straumann, previously ran France and North America
  • Total Compensation: CHF 4.70M (23% salary, 77% performance-based)
  • Insider Ownership: 0.024% (CHF ~3.9M) -- LOW skin in the game
  • Assessment: Competent operator who has navigated COVID and China VBP well. Revenue has grown from CHF 1.6B to CHF 2.6B under his leadership. However, low personal ownership is a concern.

Capital Allocation Track Record

Use of FCF Estimated % Assessment
Organic CapEx (growth) ~40% Heavy investment in manufacturing capacity
Maintenance CapEx ~15% Necessary
Dividends ~15% Growing steadily (CHF 0.75 to CHF 1.00 in 3 years)
M&A ~20% Mixed -- Neodent excellent, DrSmile divested at loss
Share buybacks ~10% Modest, not aggressive

Dividend History (Post 10:1 split)

Year Dividend/Share Payout Ratio Yield
2022 CHF 0.75 ~30% ~0.7%
2023 CHF 0.85 ~31% ~0.7%
2024 CHF 0.95 ~31% ~0.9%
2025 CHF 1.00 ~33% ~1.1%

The dividend is growing at ~10% CAGR but the yield is negligible at ~1%. This is not an income stock.

6. Catalyst Analysis

Catalyst Type Timeline Probability Impact
Margin expansion (2026 guidance +30-60bps) Operational 12 months 70% Moderate
ClearCorrect gaining aligner share Growth 2-3 years 40% Moderate
Emerging market penetration (LATAM +18%) Growth Ongoing 80% High
Acquisition of Nobel Biocare (if Envista sells) M&A Speculative 10% Very High
Share price recovery from -30% drawdown Mean reversion 6-12 months 50% Moderate

No clear near-term catalyst to close the valuation gap. The stock is expensive even after the drawdown. Without a catalyst, Klarman would require 30%+ margin of safety.

7. Megatrend Resilience

Megatrend Score Notes
China Tech Superiority -1 China VBP risk; but China only ~10% revenue
Europe Degrowth -1 EMEA is 42% of revenue; elective dental sensitive to economy
American Protectionism 0 Swiss HQ, but US operations; tariff neutral
AI/Automation +1 Digital dentistry benefits from AI; workflow integration
Demographics/Aging +2 Direct beneficiary -- aging population needs more implants
Fiscal Crisis 0 Elective dental not government-funded in most markets
Energy Transition 0 Minimal exposure

Total: +1 | Tier 3 "Adaptable"

The demographics tailwind is real and significant: only ~5% of edentulous patients globally receive implants, creating a long growth runway. However, European exposure and China VBP risk are headwinds.

8. Valuation

Valuation Trinity

Method Value/Share vs CHF 94.16 Margin of Safety
Graham Number CHF 26 -72% N/A (not a value stock)
NCAV Negative N/A N/A
Owner Earnings (10x Core) CHF 29 -69% N/A
Owner Earnings (15x Core) CHF 43 -54% N/A
Owner Earnings (25x Growth) CHF 72 -24% -24% (negative)
DCF (8% WACC, 10% growth 5yr, 3% terminal) CHF 80 -15% -15% (negative)
EV/EBITDA relative (20x current) CHF 100 +6% Fair
Private Market Value (30x EBIT) CHF 123 +31% 31%

DCF Model (Conservative)

Assumptions:
- Revenue growth: 9% organic (Years 1-5), 5% (Years 6-10)
- EBIT margin: 26% expanding to 28%
- Tax rate: 15%
- WACC: 8% (CHF risk-free 1.5%, equity premium 5%, beta 1.5)
- Terminal growth: 3%
- Shares: 159.45M

Year 1-5 NOPAT: CHF 495M growing to CHF 645M
Year 6-10 NOPAT: CHF 645M growing to CHF 780M
Terminal Value: CHF 780M / (8% - 3%) = CHF 15,600M
PV of Cash Flows + Terminal: CHF 12,700M
Fair Value per Share: ~CHF 80

Sensitivity (Growth Rate / WACC):
         7%     8%     9%
  7%   CHF 103  CHF 92  CHF 82
  8%   CHF 86   CHF 78  CHF 71
  9%   CHF 73   CHF 67  CHF 62

Intrinsic Value Estimate

Weighted average of valuation methods (excluding Graham/NCAV which are inappropriate for growth companies):

Method Weight Value Weighted
DCF Conservative 40% CHF 80 CHF 32
Owner Earnings (25x) 25% CHF 72 CHF 18
EV/EBITDA relative 20% CHF 100 CHF 20
Private Market Value 15% CHF 123 CHF 18
Weighted IV CHF 88

Current Price CHF 94.16 vs IV CHF 88 = 7% OVERVALUED

Entry Prices

Strong Buy (30% MOS):    CHF 62
Accumulate (20% MOS):    CHF 70
Fair Value:              CHF 88
Take Profits:            CHF 106
Sell:                    CHF 132

9. Investment Recommendation

+---------------------------------------------------------------+
|                 INVESTMENT RECOMMENDATION                       |
+---------------------------------------------------------------+
| Company: Straumann Holding AG      Ticker: STMN.SW             |
| Current Price: CHF 94.16           Date: February 21, 2026     |
+---------------------------------------------------------------+
| VALUATION SUMMARY                                               |
| +-------------------------+-----------+---------------------+   |
| | Method                  | Value     | vs Current Price    |   |
| +-------------------------+-----------+---------------------+   |
| | Graham Number           | CHF 26    | -72% (N/A)          |   |
| | DCF (Conservative)      | CHF 80    | -15% (overvalued)   |   |
| | Owner Earnings (25x)    | CHF 72    | -24% (overvalued)   |   |
| | Private Market Value    | CHF 123   | +31% MOS            |   |
| | EV/EBITDA relative      | CHF 100   | +6%                 |   |
| +-------------------------+-----------+---------------------+   |
|                                                                 |
| INTRINSIC VALUE ESTIMATE: CHF 88 (weighted average)            |
| MARGIN OF SAFETY: -7% (OVERVALUED)                              |
+---------------------------------------------------------------+
| RECOMMENDATION:  [ ] BUY  [ ] HOLD  [ ] SELL  [X] WAIT         |
+---------------------------------------------------------------+
| STRONG BUY PRICE:         CHF 62 (30% below IV)                |
| ACCUMULATE PRICE:         CHF 70 (20% below IV)                |
| FAIR VALUE:               CHF 88                                |
| TAKE PROFITS:             CHF 106 (20% above IV)               |
| SELL PRICE:               CHF 132 (50% above IV)               |
+---------------------------------------------------------------+
| POSITION SIZE: 2-3% of portfolio (when entry reached)          |
| CATALYST: Margin expansion + emerging market growth (12-24 mo) |
| PRIMARY RISK: China VBP contagion to Western markets            |
| SELL TRIGGER: ROE <12% for 2 consecutive years                  |
+---------------------------------------------------------------+

10. Decision Synthesis

Why This Opportunity Exists

The stock has declined 30% from its 52-week high due to:

  1. Slowing organic growth (13.7% in 2024 -> 8.9% in 2025)
  2. Currency headwinds (CHF strength eroding reported results)
  3. Broader medtech derating
  4. China VBP uncertainty

Why It Is Not Cheap Enough

Despite the 30% drawdown, the stock remains expensive:

  • P/E 42x is still 2x the market average
  • P/B 7x implies paying massive premium to book
  • FCF yield of only 2.2% offers poor return
  • Organic growth deceleration suggests the growth premium should shrink

The Patient Investor's Path

Straumann is the kind of business Buffett describes as "wonderful" -- high returns on capital, durable competitive advantages, and a long growth runway. But even wonderful businesses can be terrible investments at the wrong price.

The right approach is:

  1. Watch and wait for a larger drawdown (target CHF 60-70)
  2. Monitor quarterly organic growth rates (should stay >8%)
  3. Watch China for VBP contagion signals
  4. Buy aggressively if the stock reaches CHF 62-70 (Strong Buy / Accumulate zone)

A 30-40% pullback from current levels could come from:

  • Broader market correction
  • Disappointing quarterly results
  • China VBP expansion
  • ClearCorrect writedown

Expected Return Scenarios

Scenario Probability 5-Year Return Weighted
Bull (rerating to 35x, 12% growth) 20% +80% +16%
Base (25x, 9% growth) 45% +20% +9%
Bear (20x, 6% growth) 25% -15% -4%
Disaster (VBP contagion, 15x) 10% -50% -5%
Expected 5-Year Return 100% +16%

At CHF 94, the expected 5-year return of +16% translates to ~3% annualized -- insufficient for the risk taken. At CHF 65, the expected return would be ~60% (10% annualized), which would be compelling.

Sources & Data Extracted

Source Key Data
Straumann IR (straumann.com/investors) Annual reports, presentations, dividend history
EQS News ad-hoc releases FY 2024 and FY 2025 full-year results (comprehensive)
StockAnalysis.com (SWX:STMN) P/E, P/B, ROE, ROIC, EPS, book value, FCF
Multiples.vc Historical LTM revenue, EBITDA, margins, EV multiples
CompaniesMarketCap.com Historical revenue in USD (2002-2024)
MarketScreener Valuation, P/E, dividend data
StockOpine research Revenue diversification history, competitive positioning
Industry reports (MarketsandMarkets, Fortune BI) Global dental implant market share data