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Embecta (EMBC): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jun 30, 2026, filed Aug 7, 2026; rules v1.1
Embecta (EMBC): 0 rules of 10 triggered on the filings to Jun 30, 2026. 1 to review; 2 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Adjusted profit = economic profit To review · confidence low
Adjusted EPS was 10% or more above GAAP in 2 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $162M to $182M; working capital and lower capex explain 21% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $36M |
| Operating cash flow | $192M |
| Capex, year before | $16M |
| Capex | $9M |
| Free cash flow, year before | $20M |
| Free cash flow | $182M |
| Change in FCF | $162M |
| Change in capex | −$6M |
| Working capital: change in its cash contribution | $28M |
| Of which: capex cut | $6M |
| Of which: working capital released | $28M |
| Share of the increase that need not repeat | +21.3% |
| Operating cash flow before working capital: change | 127900000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 2.9% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $32M |
| Revenue | $1.1B |
| SBC / revenue | +2.9% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 58.3M shares |
| Diluted shares | 58.9M shares |
| Diluted shares: change | +1.0% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 0% against revenue -8% in Q3 FY26; DSO 55 against a median of 59: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | -8.1% |
| Receivables, year over year | -0.3% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | -14.4% |
| Receivables y/y, quarter before | -20.7% |
| Days sales outstanding | 55.1 |
| DSO, median of eight quarters | 58.7 |
| Receivables | $182M |
| Revenue | $272M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit To review confidence low
Adjusted EPS was 10% or more above GAAP in 2 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 0.71 / 0.74 / -0.042; 2026-03-31 / 0.27 / -0.07 / 1.259; 2026-06-30 / 0.56 / 0.36 / 0.357 |
| Quarters with adjusted ≥ 10% above GAAP | 2 |
| Quarters compared | 3 |
| Latest gap | +35.7% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-12-31 (adjusted 0.71 vs GAAP 0.74) · 2026-03-31 (adjusted 0.27 vs GAAP -0.07) · 2026-06-30 (adjusted 0.56 vs GAAP 0.36)
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Not triggered confidence medium
$10M comes due within a year, 39.9× covered by cash and investments of $215M plus $165M of free cash flow.
The figures and how they are read
| Cash and investments | $215M |
| Debt | $1.4B |
| Net debt | $1.2B |
| Due within a year | $10M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $165M |
| Cash plus free cash flow | $379M |
| Coverage of what is due | 39.9 |
| Due in the second year | $10M |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY25 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS fell 54% and net income fell 54% in Q3 FY26; the share count rose 0.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 FY26 |
| Quarter before | Q3 FY25 |
| EPS, year before | $0.78 |
| EPS | $0.36 |
| Net income, year before | $46M |
| Net income | $21M |
| Diluted shares, year before | 58.5M shares |
| Diluted shares | 58.5M shares |
| EPS growth | -53.6% |
| Net income growth | -53.6% |
| Diluted shares: change | +0.0% |
| eps from profit | -$0.42 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 FY26 (net income, diluted shares, EPS) · Q3 FY25 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Embecta: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.