Most insider buys are small and easy to dismiss. A KKR-connected director spending $691,900 of his own money the day after earnings is harder to ignore.
Read on, and you get the breakdown of whether the dental distributor’s Q1 beat, new CEO cost-out plan, and 25% SaaS subscriber growth back up what that buy is signaling.
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Q1 Beat on Revenue, EPS, and EBITDA With Guidance Reaffirmed
Henry Schein, Inc. (Nasdaq: HSIC) reported Q1 2026 total net sales of $3.37 billion, up 6.3% year over year, beating analyst estimates of $3.34 billion. Non-GAAP diluted EPS came in at $1.32 against a $1.22 consensus, an 8.4% beat.
Adjusted EBITDA hit $289 million, up 11.6% from $259 million a year ago, beating estimates by 5.1%. Full-year 2026 non-GAAP EPS guidance was reaffirmed at a midpoint of $5.30.
The beat was not evenly spread. Dental and Technology were the engines. Medical grew just 1.7% on light flu season demand for diagnostic products.
Seasonal, not structural. Lowery, who became CEO on March 2, replacing Stanley Bergman after 35 years, cited continuing second-half 2025 momentum and market share gains.
Revenue $3.37B, up 6.3%, beat consensus by 0.8%: Dental is carrying its weight.
Non-GAAP EPS $1.32, beat $1.22 consensus by 8.4%: First full quarter under new CEO.
Adjusted EBITDA $289M, up 11.6%: Growing faster than revenue.
2026 EPS guidance midpoint $5.30 reaffirmed: No cuts, no hedging on the outlook.
At $73 and a $5.30 EPS midpoint, you are paying 13.7x forward earnings. Healthcare distributor peers with weaker growth trade at 15x to 18x.
Action: Buy HSIC at $73. The 8.4% EPS beat plus guidance reaffirmation is the baseline. Exit if Q2 non-GAAP EPS comes in below $1.20.
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William Daniel Bought $691,900 of Stock the Day After Earnings
On May 12, 2026, the day after Q1 results were released, director William Daniel purchased 10,000 shares of HSIC at $69.19 per share. Total cost: $691,900. That doubled his personal position from 10,000 to 20,000 shares.
Daniel is not a passive board member. He is an Executive Advisor to KKR and joined the Henry Schein board as part of KKR’s strategic investment in the company.
Directors who sit through earnings calls and then write personal checks at $69.19, below where the company was buying back its own shares, are making a very specific statement about where they think the stock goes.
10,000 shares at $69.19 on May 12, the day after Q1 beat: Deliberate timing.
Doubled personal position to 20,000 shares: Not a token purchase.
$691,900 out of pocket: This is not a routine RSU award. It is open-market buying.
This is the most significant insider purchase at Henry Schein in at least a year, following a quarter where the company beat estimates and reaffirmed guidance. Combined with KKR’s positioning, this is not one person speculating.
Action: Any pullback to $68 to $70 is a buy. That is where Daniel bought and where the company buyback has been active.
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KKR Invested $250M and Has Room to Buy Up to 19.9% of the Company
KKR invested $250 million in Henry Schein on May 16, 2025, at $76.10 per share, acquiring 3,285,152 shares and approximately a 12% stake.
The strategic partnership agreement subsequently gave KKR the ability to build its stake up to 19.9% of outstanding shares through open-market purchases.
Two KKR-affiliated directors are on the board: Max Lin, a KKR partner and head of healthcare for the Americas, and William Daniel, Executive Advisor to KKR and former Danaher executive. Both joined as independent directors.
KKR is in at $76.10 and is currently underwater. A sophisticated PE firm with board seats, a mandate to create value, and room to buy more is not passive.
You are aligning with one of the more resourced value-creation operations in global finance.
$250M invested at $76.10 per share in May 2025: KKR is currently underwater on the original position.
Stake can grow from 12% to up to 19.9%: A structural buyer exists at current prices.
Two KKR directors on the board: Max Lin and William Daniel, both with operational and healthcare backgrounds.
KKR requested the amendment to 19.9% because it wanted more room to buy. That request is itself a signal.
Action: Check KKR’s 13F each quarter. Position growing toward 15% to 19.9% means institutional conviction is building, and you add alongside them.
New CEO Frederick Lowery Is Running a Real $200M Cost-Out Plan
Frederick Lowery became Henry Schein’s CEO on March 2, 2026, the first leadership transition in 35 years.
His mandate is clear from the earnings call: more than $200 million of annual operating income improvement over the next few years, with a $125 million run-rate by the end of 2026.
Lowery explicitly said he is taking a fresh look at people, process, and technology to build a culture of continuous improvement. For a company that has operated under a single CEO for 35 years, that kind of mandate is genuinely different.
The $125M run-rate by year-end 2026 is specific and trackable. It shows up in operating income and EPS. If it lands, forward estimates move higher, and the 13.7x multiple gets even cheaper on a forward basis.
$200M+ operating income improvement target over the next few years: A real mandate, not a vague efficiency pledge.
$125M run-rate by the end of 2026: Specific enough to hold management accountable.
Fresh look at people, process, and technology: Thirty-five years of inertia is being examined.
Lowery committed to this target in his first earnings call as CEO. CEOs who open with specific cost targets are telling you exactly how they intend to run the business.
Action: On the Q2 call, listen for the $125M run-rate update. Ahead of schedule means add. Any softening of the language means a reduction
SaaS Subscribers Up 25% and Value-Added Services Growing at 10.6%
The part of Henry Schein that the distribution headline number undersells is the software and technology layer. Dentrix Ascend in the US and Dentally internationally are cloud-based dental practice management platforms.
Subscribers across both grew 25% year over year to over 13,000. Global Technology Group sales grew 7.0%, with 6.9% coming from internal growth.
Global Value-Added Services, which includes the cloud platforms and practice management offerings, grew 10.6% on 7.8% internal growth.
Practice management software is renewed monthly or annually.
It does not cancel after one filling. Henry Schein collecting SaaS fees from 13,000-plus dental practices is a different revenue quality than selling gloves, and it is growing 25% inside a 13.7x earnings multiple.
13,000+ cloud-based subscribers, up 25% year over year: Dentrix Ascend and Dentally both growing.
Global Technology sales up 7.0%, 6.9% internal growth: Software layer accelerating.
Value-Added Services up 10.6%, 7.8% internal growth: The highest-growth segment in the business.
SaaS revenue is recurring and contract-based: Different quality than distribution revenue.
You are buying a distribution company with a 25%-growing software business inside it. The SaaS valuation is essentially free at 13.7x earnings. That is the mix shift that earns a higher multiple over time.
Action: If subscribers cross 15,000 by Q3, the SaaS layer is becoming material enough to force a multiple re-rate. Add before it is formally recognized.
Trivia: How much did Warren Buffett's $10.6 million investment in The Washington Post in 1973 eventually grow to?
The Risks Are Specific, and the Medical Segment Is the One to Watch
Medical distribution was the weak link in Q1, growing just 1.7% with 1.3% internal growth. The cause was a light flu season, reducing demand for point-of-care diagnostic test products, which represent 15% to 20% of the medical division.
Management characterized this as market softness, not share loss. But the medical segment is the one to monitor over the next two quarters to confirm it is a weather event and not a trend.
Tariffs and oil are the second risk. Distribution economics run on thin spreads, and cost shocks move through fast. Guidance assumes internal mitigation holds. If it does not, margins compress quickly.
Medical grew 1.7% in Q1: Flu season weakness, not share loss, but needs Q2 confirmation.
Tariff and oil-price exposure flagged by management: Guidance assumes internal mitigation holds.
$125M cost-out target is early-stage: Lowery is two months in. Execution risk is real.
Neither risk breaks the thesis at the current valuation. Both are disclosed, specific, and trackable every quarter.
Action: Hard stop on any Q2 full-year EPS guidance cut below $5.00. Medical weakness plus cost-out miss in the same quarter means exit.
Final Word: KKR Bought It, the CEO Is Building It, and a Director Doubled Up the Day After Earnings
Dental distribution. 25%-growing software inside it. New CEO with a $200M cost-out mandate. A KKR director who wrote a $692K personal check the day after earnings. Stock at $73. KKR entered at $76.10. Company buyback running at $77.64.
Buy HSIC. Hard stop on a Q2 guidance cut. The $68 to $70 range is your add.
Setup Scorecard
Entry Window: Current levels around $73. The $68 to $70 range is a better add where Daniel bought, and where the buyback supports.
Catalyst Watch: Q2 2026 earnings for the Medical segment trend, cost-out progress update, KKR 13F filings for position changes, and Dentrix/Dentally subscriber count.
Upside Setup: $125M cost-out run-rate confirmed by year-end, SaaS subscribers cross 15,000, Medical recovers in Q2. Stock re-rates from 13.7x toward 16x to 18x forward earnings. That puts the stock in the $85 to $95 range, in line with current analyst targets.
Downside Cushion: $655M buyback authorization remaining, KKR structural demand up to 19.9%, 13.7x forward earnings below peer group, William Daniel’s $69.19 purchase creating a visible support reference.
What Moves It Next: Q2 Medical segment revenue, any cost-out commentary updating the $125M run-rate timeline, KKR open-market buying activity, and whether Dentrix Ascend subscriber growth sustains above 20%.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any value names stocks you want me to check out.
Best Regards,
—Noah Zelvis
Undervalued Edge
