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3 Medical Service Industry Stocks Set to Tackle Workforce Challenges
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The Medical Services sector is evolving rapidly, driven by digital health advances, wider adoption of value-based care and heightened focus on patient-centric and precision medicine solutions. Demand for remote treatment continues to accelerate growth in telemedicine and AI-powered analytics, with providers using these tools to improve diagnostics, streamline operations and deliver more personalized, preventive care. According to Roots Analysis, the global healthcare analytics market was estimated at $56.64 billion in 2025 and is projected to witness a CAGR of 22.7% through 2035, a tailwind for payers, providers and analytics vendors. Healthcare analytics software and services support the collection, analysis and visualization of data to identify trends, patterns, latest technologies and correlations with patient treatment.
Companies such as Medpace Holdings (MEDP - Free Report) , Enhabit, Inc. (EHAB - Free Report) and Progyny (PGNY - Free Report) are positioned to benefit from this shift. At the same time, workforce constraints are a rising headwind for traditional, labor-intensive care settings. A 2024 report from Mercer projected a nationwide healthcare worker shortage of 100,000 by 2028, worsening the existing disparities in healthcare access in certain states. This estimate also includes a shortfall of 73,000 nursing assistants nationwide. This will elevate labor costs, though tech-driven care models are driving new, specialized roles.
Industry Description
The Zacks Medical Services industry comprises third-party service providers and caregivers appointed by core healthcare companies for economies of scale. The industry includes pharmacy benefit managers, contract research organizations (CROs), wireless MedTech companies, third-party testing labs, surgical facility providers and healthcare workforce solution providers, among others. Over the years, this industry has strategically moved from volume-based to value-based care. The resurgence in medical tourism is further boosting the sector. This changing pattern of care calls for advanced facilities, thus increasing the need to appoint specialized external service providers. With the growing importance of effective healthcare management, the medical service industry has become an integral part of the modern healthcare system.
3 Trends Shaping the Future of the Medical Services Industry
Digital Revolution: The adoption of digital platforms within the medical device space is gaining prominence in the United States. Going by a Precedence Research report, the U.S. digital health market is now forecast to grow from an estimated $92.08 billion in 2025 to $248.11 billion by 2034, representing a CAGR of 11.6%.The increasing availability of unstructured health data, advanced analytics and the demand for personalized medical services underscore the growing importance of big data in healthcare. The “Big Data in Healthcare” market continues to witness strong forecasts. According to a Towards Healthcare report, the global big data in healthcare market size is valued at $110.97 billion in 2025 and is projected to witness a CAGR of 19.2% between 2026 and 2035.Other reports suggest that companies that adopted artificial intelligence technologies witnessed a 50% reduction in treatment costs and experienced more than 50% improvement in patient outcomes.
Healthcare Staffing Shortage to Continue: It has been more than five years since the pandemic ended, but the pressure it placed on the global health workforce continues to leave a lingering impact. Many frontline professionals exited the field or reduced hours amid burnout and fatigue, while an aging population and the growing cases of chronic diseases have intensified the demand for care. WHO projects a shortfall of 11 million physicians over the same period, mostly in low and lower-middle-income countries, highlighting the urgent need for workforce expansion in health systems. Based on McKinsey Health Institute’s analysis, closing this shortage could prevent 189 million years of life lost to early death and lived with disability — nearly 7% of all disease burden — and potentially deliver a $1.1 trillion global economy impact.Needless to say, this supply shortage has led to a significant rise in healthcare wages. The American Hospital Association reports total hospital expenses climbed 5.1% in 2024, far outpacing the overall inflation rate of 2.9%. Although expense growth has moderated in 2025, it remains elevated, particularly in areas led by labor and supply chain pressures.
Revival in the Nursing Care Market: In 2025, the role of nurses continues to evolve with advancements in medical technologies and shifts in healthcare delivery models. Telehealth and remote patient monitoring have expanded nurses' reach beyond traditional hospital settings, enabling them to provide care in rural or underserved areas. Specialized nursing roles, such as nurse practitioners, critical care specialists and geriatric nurses, are in high demand due to the growing complexity of patient needs. Going by the latest Bureau of Labor Statistics data, nurse practitioners (NPs) are projected to be the third fastest-growing occupation in the United States over the next decade. The overall employment of nurse anesthetists, nurse midwives and NPs is expected to rise 40% between 2024 and 2034, much faster than the average for all occupations, with roughly 32,700 openings forecasted annually over the period.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Medical Services industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #186, which places it in the bottom 24% of 244 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates gloomy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
We will present a few stocks that have the potential to outperform the market based on a strong earnings outlook. But it’s worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Matches Sector, Underperforms S&P 500
The Medical Services Industry has performed at par with its sector, but lagged behind the S&P 500 over the past year. The stocks in this industry have collectively gained 6.8%, in line with the Medical sector. The S&P 500 composite has surged 19.3% during the same period.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 16.9X compared with the S&P 500’s 23.3X and the sector’s 21.6X.
Over the last five years, the industry has traded as high as 18.8X, as low as 13.2X, and at the median of 15.4X, as the charts below show.
Medpace: The company is a global provider of clinical research-based drug and medical device development services. Medpace’s strategy targets steady share growth in the Phase I-IV CRO market, conducting clinical trials across all major therapeutic areas, notably in Oncology, Metabolic, Cardiology, Antiviral and Anti-infective (AVAI) and Central Nervous System (CNS). It plans to expand through organic growth and potentially highly selective bolt-on acquisitions and investments.
The company's 2025 expected earnings growth rate is 17.2%. The Zacks Consensus Estimate for MEDP’s 2025 revenues indicates a rise of 18.7% from 2024. Medpace has a long-term earnings growth rate of 17.9% compared with the industry’s 15.5% growth.
Price and Consensus: MEDP
Image Source: Zacks Investment Research
Enhabit: The company is a U.S. health and hospice services provider, operating 247 home health and 115 hospice locations in 34 states as of Sept. 30, 2025. Enhabit’s current footprint is the result of a multi-decade effort to establish scale and density in important markets with attractive demographic and regulatory profiles. Its growth strategy includes opening new locations, expanding Payer Innovation contracts, and also pursuing strategic acquisitions.
EHAB’s 2025 earnings are expected to surge 161.9% over 2024. The Zacks Consensus Estimate for the company’s 2025 revenues implies growth of 2.3%. Enhabit’s earnings yield of 5.5% favorably compares to the industry’s 4.1%.
Price and Consensus: EHAB
Image Source: Zacks Investment Research
Progyny: The company specializes in fertility, family building and women's health benefits solutions in the United States. Progyny mainly generates revenue through its fertility benefits solution, in which it offers self-insured enterprise entities, their employees and partners with fertility benefits. The company also follows the route of strategic investments, acquisitions and partnerships to complement its solutions, enhance its technical capabilities.
PGNY’s 2025 earnings are expected to increase 9.8% over 2024. The Zacks Consensus Estimate for the company’s 2025 revenues indicates growth of 9.2%. Progyny has a long-term earnings growth rate of 16.6%.
Price and Consensus: PGNY
Image Source: Zacks Investment Research
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3 Medical Service Industry Stocks Set to Tackle Workforce Challenges
The Medical Services sector is evolving rapidly, driven by digital health advances, wider adoption of value-based care and heightened focus on patient-centric and precision medicine solutions. Demand for remote treatment continues to accelerate growth in telemedicine and AI-powered analytics, with providers using these tools to improve diagnostics, streamline operations and deliver more personalized, preventive care. According to Roots Analysis, the global healthcare analytics market was estimated at $56.64 billion in 2025 and is projected to witness a CAGR of 22.7% through 2035, a tailwind for payers, providers and analytics vendors. Healthcare analytics software and services support the collection, analysis and visualization of data to identify trends, patterns, latest technologies and correlations with patient treatment.
Companies such as Medpace Holdings (MEDP - Free Report) , Enhabit, Inc. (EHAB - Free Report) and Progyny (PGNY - Free Report) are positioned to benefit from this shift. At the same time, workforce constraints are a rising headwind for traditional, labor-intensive care settings. A 2024 report from Mercer projected a nationwide healthcare worker shortage of 100,000 by 2028, worsening the existing disparities in healthcare access in certain states. This estimate also includes a shortfall of 73,000 nursing assistants nationwide. This will elevate labor costs, though tech-driven care models are driving new, specialized roles.
Industry Description
The Zacks Medical Services industry comprises third-party service providers and caregivers appointed by core healthcare companies for economies of scale. The industry includes pharmacy benefit managers, contract research organizations (CROs), wireless MedTech companies, third-party testing labs, surgical facility providers and healthcare workforce solution providers, among others. Over the years, this industry has strategically moved from volume-based to value-based care. The resurgence in medical tourism is further boosting the sector. This changing pattern of care calls for advanced facilities, thus increasing the need to appoint specialized external service providers. With the growing importance of effective healthcare management, the medical service industry has become an integral part of the modern healthcare system.
3 Trends Shaping the Future of the Medical Services Industry
Digital Revolution: The adoption of digital platforms within the medical device space is gaining prominence in the United States. Going by a Precedence Research report, the U.S. digital health market is now forecast to grow from an estimated $92.08 billion in 2025 to $248.11 billion by 2034, representing a CAGR of 11.6%.The increasing availability of unstructured health data, advanced analytics and the demand for personalized medical services underscore the growing importance of big data in healthcare. The “Big Data in Healthcare” market continues to witness strong forecasts. According to a Towards Healthcare report, the global big data in healthcare market size is valued at $110.97 billion in 2025 and is projected to witness a CAGR of 19.2% between 2026 and 2035.Other reports suggest that companies that adopted artificial intelligence technologies witnessed a 50% reduction in treatment costs and experienced more than 50% improvement in patient outcomes.
Healthcare Staffing Shortage to Continue: It has been more than five years since the pandemic ended, but the pressure it placed on the global health workforce continues to leave a lingering impact. Many frontline professionals exited the field or reduced hours amid burnout and fatigue, while an aging population and the growing cases of chronic diseases have intensified the demand for care. WHO projects a shortfall of 11 million physicians over the same period, mostly in low and lower-middle-income countries, highlighting the urgent need for workforce expansion in health systems. Based on McKinsey Health Institute’s analysis, closing this shortage could prevent 189 million years of life lost to early death and lived with disability — nearly 7% of all disease burden — and potentially deliver a $1.1 trillion global economy impact.Needless to say, this supply shortage has led to a significant rise in healthcare wages. The American Hospital Association reports total hospital expenses climbed 5.1% in 2024, far outpacing the overall inflation rate of 2.9%. Although expense growth has moderated in 2025, it remains elevated, particularly in areas led by labor and supply chain pressures.
Revival in the Nursing Care Market: In 2025, the role of nurses continues to evolve with advancements in medical technologies and shifts in healthcare delivery models. Telehealth and remote patient monitoring have expanded nurses' reach beyond traditional hospital settings, enabling them to provide care in rural or underserved areas. Specialized nursing roles, such as nurse practitioners, critical care specialists and geriatric nurses, are in high demand due to the growing complexity of patient needs. Going by the latest Bureau of Labor Statistics data, nurse practitioners (NPs) are projected to be the third fastest-growing occupation in the United States over the next decade. The overall employment of nurse anesthetists, nurse midwives and NPs is expected to rise 40% between 2024 and 2034, much faster than the average for all occupations, with roughly 32,700 openings forecasted annually over the period.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Medical Services industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #186, which places it in the bottom 24% of 244 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates gloomy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
We will present a few stocks that have the potential to outperform the market based on a strong earnings outlook. But it’s worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Matches Sector, Underperforms S&P 500
The Medical Services Industry has performed at par with its sector, but lagged behind the S&P 500 over the past year. The stocks in this industry have collectively gained 6.8%, in line with the Medical sector. The S&P 500 composite has surged 19.3% during the same period.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 16.9X compared with the S&P 500’s 23.3X and the sector’s 21.6X.
Over the last five years, the industry has traded as high as 18.8X, as low as 13.2X, and at the median of 15.4X, as the charts below show.
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
3 Stocks to Buy Right Now
Below, we present three stocks from the Medical Services industry that have been witnessing positive earnings estimate revisions and carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medpace: The company is a global provider of clinical research-based drug and medical device development services. Medpace’s strategy targets steady share growth in the Phase I-IV CRO market, conducting clinical trials across all major therapeutic areas, notably in Oncology, Metabolic, Cardiology, Antiviral and Anti-infective (AVAI) and Central Nervous System (CNS). It plans to expand through organic growth and potentially highly selective bolt-on acquisitions and investments.
The company's 2025 expected earnings growth rate is 17.2%. The Zacks Consensus Estimate for MEDP’s 2025 revenues indicates a rise of 18.7% from 2024. Medpace has a long-term earnings growth rate of 17.9% compared with the industry’s 15.5% growth.
Price and Consensus: MEDP
Image Source: Zacks Investment Research
Enhabit: The company is a U.S. health and hospice services provider, operating 247 home health and 115 hospice locations in 34 states as of Sept. 30, 2025. Enhabit’s current footprint is the result of a multi-decade effort to establish scale and density in important markets with attractive demographic and regulatory profiles. Its growth strategy includes opening new locations, expanding Payer Innovation contracts, and also pursuing strategic acquisitions.
EHAB’s 2025 earnings are expected to surge 161.9% over 2024. The Zacks Consensus Estimate for the company’s 2025 revenues implies growth of 2.3%. Enhabit’s earnings yield of 5.5% favorably compares to the industry’s 4.1%.
Price and Consensus: EHAB
Image Source: Zacks Investment Research
Progyny: The company specializes in fertility, family building and women's health benefits solutions in the United States. Progyny mainly generates revenue through its fertility benefits solution, in which it offers self-insured enterprise entities, their employees and partners with fertility benefits. The company also follows the route of strategic investments, acquisitions and partnerships to complement its solutions, enhance its technical capabilities.
PGNY’s 2025 earnings are expected to increase 9.8% over 2024. The Zacks Consensus Estimate for the company’s 2025 revenues indicates growth of 9.2%. Progyny has a long-term earnings growth rate of 16.6%.
Price and Consensus: PGNY
Image Source: Zacks Investment Research