It’s been a dark few months for Smith and nephew (LSE: SN.) and its stock price. After reaching 14-month highs in September, the FTSE100 the company lost 21% of its value.

Following a frosty trading update on Thursday (October 31), it fell back below £10 per share. And it falls further in weekend trading.

As a long-term investor, I wonder if this represents a great dip buying opportunity. Is Smith & Nephew stock now a great deal?

Forecasts revised downwards

Smith & Nephew manufactures a range of health products. It is a market leader in medical devices, as well as artificial limbs and hips and wound treatment products. And he scared investors on Halloween by cutting his full-year forecast.

Revenue growth in 2024 now stands at 4.5%, a sharp decline from the 5-6% previously forecast.

Commercial profit margins are now forecast at “until“18% compared to 17.5% in 2023. But this is lower than a reading of”at leastt” 18% previously expected. And for 2025, margins should be between 19 and 20%, compared to 20% initially planned.

Smith & Nephew’s is suffering from difficult conditions in China, particularly in its Orthopedics division. Group sales increased 4% in the third quarter to $1.4 billion. But excluding Chinese revenue, turnover is up 5.9% year-on-year.

Fragile China

China represents a huge growth market for the company. However, destocking and growing local competition appear to be impacting Orthopedics sales. And regarding the latter, Panmure Liberum analysts affirm that “it is unclear whether Smith & Nephew will be able to recover this revenue“.

The FTSE company is also suffering from the difficulties of the Chinese economy. He had hoped that the country’s centralized volume-based purchasing (VBP) policy would increase the number of medical procedures performed. But the economic downturn means that hasn’t happened, which has also affected sports medicine sales.

Looks good in the long run

The problems facing Smith & Nephew may take time to abate. So Thursday’s third-quarter update may not be the last business statement to spook the market.

That said, I think now might be a good time to consider investing. In the long term, demand for healthcare products is expected to explode, driven by steady population growth and increasing investments in emerging markets.

I certainly expect a sharp rebound in sales in China when the economic landscape improves.

It is also encouraging to see the progress the company is making in the United States, particularly in the area of ​​hip and knee implants.

Smith & Nephew’s diverse product line allows it to take advantage of this structural opportunity. Its long history of innovation and creating market-leading products bodes well, as does its strong position in the rapidly growing field of robotics.

For 2025, Smith & Nephew shares trade in futures price/earnings ratio (P/E) by only 11.3 times. It also takes care of a sub-1 price/earnings growth ratio (PEG) of 0.6, another figure which underlines its cheapness.

While not without risks, I think Smith & Nephew is a great stock for patient investors to consider.