Is MDLN a good stock to buy? We came across a bullish thesis on Medline Inc. on The Pursuit of Compounding’s Substack. In this article, we will summarize the bulls’ thesis on MDLN. Medline Inc.’s share was trading at $41.36 as of March 27th. MDLN’s trailing and forward P/E were 29.91 and 29.24 respectively according to Yahoo Finance.
Medline Industries (MDLN) represents a high-quality, vertically integrated healthcare supplier with a unique investment profile, though near-term dynamics are complicated by private equity overhang and structural intricacies. Unlike pure-play distributors such as McKesson, Cardinal Health, or Cencora, Medline combines manufacturing and logistics, producing roughly 190,000 of the 335,000 products it sells and operating 69 global distribution centers with over 2,000 trucks.
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This scale enables next-day delivery to 95% of the U.S., while Prime Vendor agreements lock in multi-year contracts with a 98% retention rate, driving both revenue growth and high-margin profitability. The proprietary “Medline Brand” segment accounts for over 80% of Adjusted EBITDA, offering superior margins and recurring cash flows.
The company’s 2025 IPO raised $7 billion, primarily to reduce debt from the $34 billion LBO, lowering interest expense by an estimated $300 million annually and improving free cash flow, which reached $1.4 billion in 2024. However, Medline’s complex Up-C structure, continued private equity ownership of roughly 69% of units, and a Tax Receivable Agreement create significant near-term risk. As PE sponsors exit, the potential surge in tradable shares could pressure the stock, creating a notable overhang.
Operationally, Medline’s combination of manufacturing scale, proprietary products, and resilient logistics positions it for long-term compounding, and its strong cash generation offers flexibility for M&A or shareholder returns. Nevertheless, until the private equity overhang and structural uncertainties are resolved, public investors face meaningful near-term downside risk. Consequently, while the business itself is exceptionally strong and strategically defensible, MDLN’s current equity valuation warrants caution, making it attractive opportunity for long term investors.
Previously, we covered a bullish thesis on Medtronic plc (MDT) by Investing Intel in May 2025, highlighting strong FY2025 results and the planned spin-off of its diabetes business to unlock value. MDT’s stock price has appreciated by approximately 8.01% since our coverage. The Pursuit of Compounding shares a similar view but emphasizes Medline Inc.’s (MDLN) vertically integrated operations, high-margin products, and near-term private equity overhang.
Medline Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held MDLN at the end of the fourth quarter which was 0 in the previous quarter. While we acknowledge the risk and potential of MDLN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MDLN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
