MeritValue

SMITH & NEPHEW PLC

SNNdata completeness 88%11 fiscal years on file

Data notes: no data for concept 'capex'

The thesis, from the filings

SMITH & NEPHEW PLC earns about 5% on invested capital, with a roughly flat share count. The applicable estimate puts fair value near $4.86 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$5.21B1$5.22B2$5.55B3$5.81B3$6.16B3
Net income$524M4$223M5$263M6$412M6$625M6
Operating cash flow$877M7$468M8$608M9$987M9$1.29B9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$3.14B10$2.68B11$2.89B12$3.13B13$3.11B13
Cash & equivalents$1.29B14$350M15$302M16$619M16$557M16
Diluted shares885.2M877.6M877.7M877.7M877.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$60.26
your share of equity
Profit it earned you last year
$7.12
Free cash flow it threw off
—
Debt you’d be carrying
$35.44

10 shares is a claim on $60.26 of net worth that earned you $7.12 last year, against $35.44 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
5% avg · 5y
FY21 7%FY22 3%FY23 3%FY24 5%FY25 8%

It earned an average 5% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−1% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$4.86
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$412M
  • growthAssumed0.0%
Graham Number
$9.85
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F · period ending 2021-12-31 · accession 0001558370-24-002867 (RevenueFromContractsWithCustomers)
  2. 20-F · period ending 2022-12-31 · accession 0001558370-25-002550 (RevenueFromContractsWithCustomers)
  3. 20-F · period ending 2023-12-31 · accession 0001104659-26-028258 (RevenueFromContractsWithCustomers)
  4. 20-F · period ending 2021-12-31 · accession 0001558370-24-002867 (ProfitLoss)
  5. 20-F · period ending 2022-12-31 · accession 0001558370-25-002550 (ProfitLoss)
  6. 20-F · period ending 2023-12-31 · accession 0001104659-26-028258 (ProfitLoss)
  7. 20-F · period ending 2021-12-31 · accession 0001558370-24-002867 (CashFlowsFromUsedInOperatingActivities)
  8. 20-F · period ending 2022-12-31 · accession 0001558370-25-002550 (CashFlowsFromUsedInOperatingActivities)
  9. 20-F · period ending 2023-12-31 · accession 0001104659-26-028258 (CashFlowsFromUsedInOperatingActivities)
  10. 20-F · period ending 2021-12-31 · accession 0001558370-23-002847 (Borrowings)
  11. 20-F · period ending 2022-12-31 · accession 0001558370-24-002867 (Borrowings)
  12. 20-F · period ending 2023-12-31 · accession 0001558370-25-002550 (Borrowings)
  13. 20-F · period ending 2024-12-31 · accession 0001104659-26-028258 (Borrowings)
  14. 20-F · period ending 2021-12-31 · accession 0001558370-24-002867 (CashAndCashEquivalents)
  15. 20-F · period ending 2022-12-31 · accession 0001558370-25-002550 (CashAndCashEquivalents)
  16. 20-F · period ending 2023-12-31 · accession 0001104659-26-028258 (CashAndCashEquivalents)