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    Evaluating Medline (MDLN) After Its Blockbuster $6.26 Billion IPO and 40% First-Day Surge

    Simply Wall St·12/21/2025 05:18:09
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    Medline (MDLN) has just pulled off the largest IPO of 2025, raising about $6.26 billion, and the stock immediately jumped more than 40% as investors reacted to its deleveraging story.

    See our latest analysis for Medline.

    That first day pop has carried into the near term, with a 1 day share price return of 5.44% taking Medline to $41.65. Its year to date share price return of 1.59% suggests early momentum is building rather than fading as the IPO closes, index inclusion is confirmed and new vendor wins trickle into the narrative.

    If this kind of post IPO enthusiasm has you thinking about where else capital might rotate in healthcare, it is a good moment to scan healthcare stocks for other potential beneficiaries.

    After such a strong debut on the back of deleveraging optimism and secular healthcare demand, the real question now is whether Medline’s valuation still leaves upside on the table, or if the market is already paying up for years of growth ahead.

    Price-to-Earnings of 27.1x, Is it justified?

    On a headline basis, Medline trades on a 27.1x price to earnings multiple, slightly below both its Medical Equipment peers and the broader peer group.

    The price to earnings ratio compares the current share price to the company’s per share earnings. This is a common way to frame valuation for profitable healthcare suppliers like Medline. Given Medline’s reported 33.4% earnings growth over the past year and net profit margins improving from 3.8% to 4.6%, this sub sector appropriate multiple suggests investors are already factoring in a meaningful share of recent operational progress.

    Compared to the US Medical Equipment industry average of 29.7x, Medline’s 27.1x multiple represents a discount. It also sits below the 31.6x peer group average, indicating the market is valuing its earnings at a lower rate than many comparable names. See what the numbers say about this price — find out in our valuation breakdown.

    Result: Price-to-Earnings of 27.1x (ABOUT RIGHT)

    However, Medline’s margin gains could stall if hospital budgets tighten or if supply chain contracts prove less lucrative than current growth expectations assume.

    Find out about the key risks to this Medline narrative.

    Another View: Our DCF Signals Caution

    While the earnings multiple looks reasonable, our DCF model paints a very different picture, suggesting Medline is trading far above its estimated fair value of $8.62 at the current $41.65 share price. This raises the question: is the market overpaying for growth that may not materialize?

    Look into how the SWS DCF model arrives at its fair value.

    MDLN Discounted Cash Flow as at Dec 2025
    MDLN Discounted Cash Flow as at Dec 2025

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Medline for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Build Your Own Medline Narrative

    If you see the numbers differently or prefer to dig into the details yourself, you can build a complete view in just a few minutes. Do it your way.

    A great starting point for your Medline research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

    Ready for your next investing move?

    Before you move on, build an edge by using the Simply Wall Street Screener to uncover high conviction opportunities that most investors are still overlooking.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.