Saint Paul, Minnesota-based Solventum Corporation (SOLV) develops, manufactures, and commercializes a broad portfolio of solutions that leverages material & data science, clinical research, and digital capabilities. With a market cap of $12.7 billion, Solventum employs over 20,000 people in its 300+ offices and facilities spread across 38 countries. It was recently spun off by 3M Company (MMM) on Apr. 1.

Solventum is expected to announce its fourth-quarter results on Thursday, Feb. 6. Ahead of the event analysts expect SOLV to report a non-GAAP profit of $1.31 per share. The company has a mixed earnings surprise history. It has surpassed Wall Street’s earnings estimates twice over the past three quarters while missing on one other occasion.

For the full fiscal 2024, Solventum is expected to deliver an adjusted EPS of $6.58. And in fiscal 2025, its earnings are expected to decline 16.6% year-over-year to $5.49 per share.

SOLV stock prices have soared 38.7% over the past six months, significantly outperforming the S&P 500 Index’s ($SPX) 7.3% gains and the Healthcare Select Sector SPDR Fund’s (XLV) 6.9% decline during the same time frame.

Solventum’s stock prices dropped 3.5% in the trading session after the release of its mixed Q3 results on Nov. 7. While the company’s total net sales observed a marginal growth compared to the year-ago quarter to $2.1 billion which surpassed Wall Street’s expectations, its profitability took a significant hit. The company observed a notable increase in the cost of sales along with a staggering 33.5% year-over-year surge in selling, general & admin expenses to $701 million, this led to a 14.5% operating margin contraction to 17.1% and a massive 45.4% year-over-year decline in operating income to $275 million.

Meanwhile, its aggregated operating cash flow for the past three quarters decreased 29.4% year-over-year to $966 million. On a positive note, the company raised its full-year non-GAAP earnings and free cash flow guidance which mitigated the drop in stock prices.

Analysts remain cautious about the stock’s prospects. SOLV has a consensus “Hold” rating overall. Out of the 10 analysts covering the stock, one advises “Strong Buy,” eight suggest “Hold,” and one recommends a “Strong Sell” rating. As of writing Solventum is trading above its mean price target of $71.28.