There is a particular class of stock that makes most investors uncomfortable: the one that was once beloved, fell from grace, and is now in the messy middle of a turnaround. Dentsply Sirona (XRAY) is exactly that stock. The 2016 merger of two dominant dental names was supposed to create a category champion; instead it produced an accounting scandal, years of guidance cuts, and a share price that has collapsed from a post-merger high above $65 to roughly $12 in 2026. The dividend is gone, the prior CEO is gone, and Wall Street has all but given up — Stifel rates it Hold with a $13 target, and the stock is down roughly 37% over the past year.
But this screener exists precisely for moments like this. In August 2025 the board installed a new CEO, Dan Scavilla, who arrived from Globus Medical — where he engineered the $3 billion NuVasive merger — after 28 years at Johnson & Johnson. He spent his first 90 days on a listening tour, then took every bit of bad news at once. The result is a stock now triggering three independent buy signals at the same time: a Balance Sheet Cleanup, Insider Buying, and a Bottomer. That convergence — what Charlie Munger called the Lollapalooza effect — is rare enough to warrant serious investigation.
Signal 1·Balance Sheet Cleanup
The most consequential decision of Scavilla's young tenure was capital allocation. Alongside full-year 2025 results, reported in February 2026, the board eliminated the dividend outright and redirected that cash — roughly $128 million paid out in 2025 alone — toward debt reduction first and share repurchases second. For a management team trying to repair a balance sheet, that is the textbook move: stop performing for the yield crowd, and start retiring liabilities while the equity is cheap.
The cleanup did not stop with the dividend. Management approved a restructuring program targeting roughly $120 million in annual cost savings, explicitly earmarked to self-fund the turnaround — debt paydown, accelerated R&D, and a rebuilt commercial organization. Crucially, 2025 was also the year the company took its impairments: more than $650 million in goodwill and intangible write-downs across the Implant, Orthodontic, and Connected Technology segments, which drove a reported net loss of roughly $598 million for the year. Those are non-cash charges. What they signal is a leadership team willing to reset the carrying value of the business to reality rather than defend an inflated book — exactly what you want to see before a re-rating.
Strip the noise away and the logic is clean: a company generating real operating cash flow has stopped paying it out to shareholders and started using it to delever and buy back stock at a depressed price. That is the Balance Sheet Cleanup signal in its purest form — capital being redeployed from distribution toward structural repair.
Signal 2·Insider Buying — The Next Best Thing
Here is an honest caveat: the CEO himself is not buying stock in the open market. Scavilla's recent Form 4 activity has been routine compensation mechanics — shares withheld to cover taxes on vesting RSUs, not discretionary purchases. So this is not a CEO-conviction story.
But the next best thing is happening, and it is arguably louder: the board is buying, with real money, at current prices. Director Gregory Lucier — co-chair of the newly formed Growth and Value Creation Committee overseeing the turnaround — bought 15,000 shares at about $12.45 in March 2026, extending a pattern of near-continuous accumulation (roughly thirteen open-market trades since November 2024, almost all of them buys). James Forbes, appointed to the board in late February 2026, bought 5,000 shares at $13.47 within days of joining, then another 5,000 at $12.48 a week later — doubling his personal stake almost immediately. A third director stepped in earlier, buying 9,337 shares at $10.71 in November 2025.
Directors do not buy stock to send a quarterly message; they have no options to defend and no earnings call to perform on. When the people who approved the dividend elimination and the restructuring plan turn around and put their own capital into the shares at $12, they are telling you they believe the reset has set a floor — and that the gap between the current price and intrinsic value is too wide to ignore. The fact that the buying is concentrated among the directors steering the recovery, rather than scattered, makes it more meaningful, not less.
Signal 3·Bottomer — The Dividend Elimination
The Bottomer signal is the most contrarian of the three and, historically, one of the most reliable. The thesis: when a company that has paid a dividend for decades finally kills it — not trims it, kills it — that act of capitulation often marks the bottom. The pretending is over. The worst fears are confirmed. The last income-oriented holders are flushed out, and the stock changes hands from people who owned it for the yield to people who own it for the recovery.
Dentsply Sirona did exactly this. In February 2026 it ended a 32-year streak of dividend payments. For a stock already near multi-decade lows, that was the final shoe to drop — and it came bundled with the net loss, the impairments, and a lowered forward outlook. In other words, management threw everything into one quarter: the kitchen-sink reset that new CEOs use to clear the decks so every subsequent quarter can be a step up from a washed-out base.
Scavilla has been blunt about why this turnaround is different from prior false starts. Asked on the Q3 2025 call what had actually changed, he said: "I feel like we were trimming branches when we should be cutting down trees. So when I talk about going faster, bolder, deeper, I think that's really what I mean." Eliminating a three-decade dividend is the act of someone cutting down trees. Bottoms built on that kind of decisive capitulation — paired with insider buying and active deleveraging — tend to hold.
The Catalyst: A Back-Half 2026 Reacceleration
A bottom is necessary but not sufficient; the bull case needs a forward catalyst, and management has named one. On the Q4 2025 earnings call held February 26, 2026, Scavilla framed 2026 as the back half of a 24-month "Return to Growth" plan, guiding full-year sales of $3.5–$3.6 billion and adjusted EPS of $1.40–$1.50, with the growth inflection explicitly weighted to the second half of the year.
The reason the recovery is back-half loaded is structural rather than hopeful. The company is shifting its dealer relationships to a drop-ship model, which creates a roughly $30 million revenue headwind in the first half of 2026 as distributors sell through existing inventory — a drag that clears by H2. Management expects the dealer-strategy benefits to land, in Scavilla's words, "closer at late third quarter, early fourth quarter," with the U.S. business targeted to return to positive growth by Q4. And he was emphatic that this is an execution story, not a bet on the macro: "Our return to health is not market dependent." Layered on top is a double-digit increase in R&D spend for 2026 to accelerate the product pipeline. The destocking headwind in H1 sets up genuinely easier comparisons — and a cleaner growth read — in the back half.
The Valuation Case
What you are buying is a business doing roughly $3.7 billion in annual revenue with structural advantages that have not disappeared. The Cerec CAD/CAM platform remains a leader in same-day, in-office dental restorations, and the imaging franchise (Orthophos, Axeos) occupies similarly defensible ground. These are not commodities — they carry long sales cycles, training requirements, multi-year consumables attachments, and software integration that makes switching genuinely painful.
The underappreciated piece is the razor-and-blade economics. Every Cerec mill, every imaging unit, and every implant system Dentsply places in a dental practice becomes a multi-year annuity of high-margin consumables, blocks, software subscriptions, and service. The equipment installed base built over decades does not churn quickly — a dentist who has trained staff on a workflow and integrated it into the practice rarely rips it out. That installed base is the asset the market is currently valuing as though it were melting, when in reality it is the most durable part of the business and the engine that funds the recovery.
At roughly $12 a share against $1.40–$1.50 of guided 2026 adjusted EPS, the stock trades around 8x forward earnings — a multiple that bakes in permanent decline. Yet the company is guiding a return to growth, retiring debt, repurchasing shares, and being bought by its own directors. If management merely executes its own plan and the multiple normalizes toward the low-to-mid teens, the stock roughly doubles without requiring any heroic assumptions. The market is pricing continued catastrophe; the signals are pricing a turn.
What Could Go Wrong
No thesis is complete without a serious accounting of the risks, and XRAY has real ones.
The first is execution. This is not the first turnaround Dentsply has announced, and Scavilla himself acknowledged the fatigue — "the customers, the employees, and the board are tired" of plans that did not deliver. If the back-half 2026 reacceleration slips, credibility erodes fast and the stock has little patience left to give. The H1 destocking drag and the wind-down of the Byte clear-aligner business also mean reported numbers get worse before they get better.
Second is management instability. The CFO departed after roughly five months in 2025, leaving an interim in the seat during the most important stretch of the turnaround. Repeated leadership churn is exactly what you do not want while executing a complex reset.
Third is the end market. Implant volumes have been soft, and changing buying behavior in China — tied to the next phase of volume-based procurement in 2026 — could pressure a historically high-margin segment. Tariffs added roughly $15 million of cost pressure recently, and a weaker consumer would hit both equipment and consumables at once.
Finally, the dividend is gone, so investors are paid nothing to wait. The entire return now depends on the recovery actually arriving. These risks are real, and they are why the stock is this cheap. The question is not whether risk exists — it always does — but whether $12 a share, with directors buying and a credible plan in motion, already over-discounts it. For a franchise this entrenched, it likely does.