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3 Medical Service Stocks Resilient Amid Persistent Workforce Shortage
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The Medical Services sector is evolving rapidly as digital health expands, value-based care gains traction, and demand for patient-centric and precision medicine solutions increases. The shift toward remote treatment is accelerating the adoption of telemedicine and AI-powered analytics, enabling providers to improve diagnostics, streamline operations and deliver more personalized care. According to Grand View Research, the healthcare analytics market was valued at $65.6 billion in 2025 and is projected to expand at a CAGR of 13.5% through 2033, creating a tailwind for payers, providers and analytics vendors. Healthcare analytics software and services help analyze current and historical industry data to predict trends and improve overall management of population health. CareDx, Inc. (CDNA - Free Report) , BrightSpring Health Services (BTSG - Free Report) and PACS Group, Inc. (PACS - Free Report) are among the companies well-positioned to capitalize on these trends.
Meanwhile, workforce shortages are straining traditional, labor-intensive care settings. AMN Healthcare’s new Healthcare Staffing Projections Through 2030 white paper notes that as of 2025, there are more than 7,700 designated Health Professional Shortage Areas (HPSAs) for primary care, affecting 76 million Americans. An estimated 13,254 additional primary care providers are needed to eliminate these designations, yet only 2% of new physicians expressed interest in working in less-populated areas.
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, 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, 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. According to Precedence Research, the global digital health market is valued at $421 billion in 2025 and is projected to expand at a CAGR of 10.8% through 2035. The growing volume of unstructured health data, advances in analytics and rising demand for personalized care are highlighting the growing role of big data in healthcare. The “Big Data in Healthcare” market continues to witness strong forecasts. Based on a Market Data Forecast report, the global healthcare big data analytics market was valued at $62.23 billion in 2025 and is projected to expand at a CAGR of 27.8% through 2034. Growth is being fueled by the rising database usage in the healthcare market as well as early identification of diseases. At the same time, the integration of artificial intelligence (AI) and machine learning into healthcare analytics is also gaining momentum.
Healthcare Staffing Shortage to Continue: The pandemic may have ended more than five years ago, but the pressure it placed on the global health workforceremains. Many frontline professionals have exited the field or cut back hours due to burnout and fatigue, while the aging population and rising rates of chronic diseases are driving greater demand for care. The World Health Organization projects a shortfall of 11 million physicians by 2030, mostly in low- and lower-middle-income countries. An analysis by the McKinsey Health Institute notes that closing this shortage could avert 189 million years of life lost to premature death and disability, or 7% of the global disease burden. It could also add $1.1 trillion to the global economy, roughly matching Switzerland’s GDP. Meanwhile, the supply shortage has led to a significant rise in healthcare wages. According to a report from theAmerican Hospital Association, workforce costs rose 5.6% in 2025 as hospitals increased wages to recruit and retain nurses, physicians and other staff. With many hospitals operating on margins that are just above breakeven, even modest increases in labor costs are difficult to manage.
Revival in Nursing Care Market: The role of nurses continues to evolve alongside advancements in medical technologies and shifts in healthcare delivery models. According to Coherent Market Insights, the Nursing Care Services market is projected to expand at a CAGR of 9.4% through 2026 to 2033, supported by the increasing geriatric population, a higher incidence of chronic diseases and technological innovations, particularly remote monitoring systems and AI-powered care analytics. The integration of digital health solutions is also helping make nursing care more scalable and cost-effective. At the same time, rising patient complexity is driving demand for specialized nursing roles, such as nurse practitioners (NPs), critical care specialists and geriatric nurses. According to the August 2025 U.S. Bureau of Labor Statistics data, the overall employment of nurse anesthetists, nurse midwives and NPs is projected to grow 35% from 2024 to 2034, with 32,700 openings forecasted annually.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Medical Services industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #89, which places it in the top 36% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust 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 is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Underperforms Sector & S&P 500
The Medical Services Industry has lagged its sector and the S&P 500 over the past year. The stocks in this industry have collectively gained 12% compared with the Medical sector’s 13.5% growth. The S&P 500 composite has risen 21% in the same period.
1-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 16.63X compared with the S&P 500’s 20.39X and the sector’s 21.98X.
Over the last five years, the industry has traded as high as 18.95X, as low as 13.22X and at the median of 15.27X, as the charts below show.
Price-to-Earnings Forward 12 Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward 12 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.
CareDx: Renowned precision medicine company, CareDx specializes in advancing care in transplant, specialty oncology and cell therapy. The company’s portfolio spans non-invasive molecular testing, clinical practice management software, AI-powered data and analytics tools and patient support solutions designed to connect diagnostic insight, clinical workflow and patient engagement. CareDx’s total revenues increased 52% in the second quarter of 2026, supported by 17% growth in Testing volumes.
CareDx sports a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for the company’s 2026 earnings calls for a surge of 105.2%, with revenues expected to increase 30.4%.
BrightSpring: The company is one of the largest independent providers of home and community-based health services in the United States, providing both pharmacy and provider services. With a focus on Senior and Specialty patients, BrightSpring provides services in lower-cost home and community settings largely to Medicare, Medicaid and commercially insured populations. In the second quarter of 2026, total revenues grew 23% year over year, and adjusted EBITDA increased 44% from the year-ago quarter.
BrightSpring sports a Zacks Rank #1 at present. For 2026, the Zacks Consensus Estimate for the company’s earnings implies a surge of 82%, while revenues are expected to grow 18.1%.
Price & Consensus: BTSG
Image Source: Zacks Investment Research
PACS Group: Renowned post-acute healthcare company, PACS Group delivers high-quality skilled nursing care through a portfolio of independently operated facilities. The company has driven significant historical growth by acquiring underperforming long-term custodial care skilled nursing facilities and converting them into higher-acuity, higher-value short-term transitional care facilities. In the second quarter of 2026, PACS Group delivered 9.1% year-over-year growth in revenues, while adjusted EBITDA grew 25% compared with the prior-year quarter.
PACS Group presently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the company’s 2026 earnings indicates an 82% jump on revenue growth of 18.1%.
View the Zacks #1 Rank List
Image: Bigstock
3 Medical Service Stocks Resilient Amid Persistent Workforce Shortage
The Medical Services sector is evolving rapidly as digital health expands, value-based care gains traction, and demand for patient-centric and precision medicine solutions increases. The shift toward remote treatment is accelerating the adoption of telemedicine and AI-powered analytics, enabling providers to improve diagnostics, streamline operations and deliver more personalized care. According to Grand View Research, the healthcare analytics market was valued at $65.6 billion in 2025 and is projected to expand at a CAGR of 13.5% through 2033, creating a tailwind for payers, providers and analytics vendors. Healthcare analytics software and services help analyze current and historical industry data to predict trends and improve overall management of population health. CareDx, Inc. (CDNA - Free Report) , BrightSpring Health Services (BTSG - Free Report) and PACS Group, Inc. (PACS - Free Report) are among the companies well-positioned to capitalize on these trends.
Meanwhile, workforce shortages are straining traditional, labor-intensive care settings. AMN Healthcare’s new Healthcare Staffing Projections Through 2030 white paper notes that as of 2025, there are more than 7,700 designated Health Professional Shortage Areas (HPSAs) for primary care, affecting 76 million Americans. An estimated 13,254 additional primary care providers are needed to eliminate these designations, yet only 2% of new physicians expressed interest in working in less-populated areas.
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, 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, 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. According to Precedence Research, the global digital health market is valued at $421 billion in 2025 and is projected to expand at a CAGR of 10.8% through 2035. The growing volume of unstructured health data, advances in analytics and rising demand for personalized care are highlighting the growing role of big data in healthcare. The “Big Data in Healthcare” market continues to witness strong forecasts. Based on a Market Data Forecast report, the global healthcare big data analytics market was valued at $62.23 billion in 2025 and is projected to expand at a CAGR of 27.8% through 2034. Growth is being fueled by the rising database usage in the healthcare market as well as early identification of diseases. At the same time, the integration of artificial intelligence (AI) and machine learning into healthcare analytics is also gaining momentum.
Healthcare Staffing Shortage to Continue: The pandemic may have ended more than five years ago, but the pressure it placed on the global health workforceremains. Many frontline professionals have exited the field or cut back hours due to burnout and fatigue, while the aging population and rising rates of chronic diseases are driving greater demand for care. The World Health Organization projects a shortfall of 11 million physicians by 2030, mostly in low- and lower-middle-income countries. An analysis by the McKinsey Health Institute notes that closing this shortage could avert 189 million years of life lost to premature death and disability, or 7% of the global disease burden. It could also add $1.1 trillion to the global economy, roughly matching Switzerland’s GDP. Meanwhile, the supply shortage has led to a significant rise in healthcare wages. According to a report from theAmerican Hospital Association, workforce costs rose 5.6% in 2025 as hospitals increased wages to recruit and retain nurses, physicians and other staff. With many hospitals operating on margins that are just above breakeven, even modest increases in labor costs are difficult to manage.
Revival in Nursing Care Market: The role of nurses continues to evolve alongside advancements in medical technologies and shifts in healthcare delivery models. According to Coherent Market Insights, the Nursing Care Services market is projected to expand at a CAGR of 9.4% through 2026 to 2033, supported by the increasing geriatric population, a higher incidence of chronic diseases and technological innovations, particularly remote monitoring systems and AI-powered care analytics. The integration of digital health solutions is also helping make nursing care more scalable and cost-effective. At the same time, rising patient complexity is driving demand for specialized nursing roles, such as nurse practitioners (NPs), critical care specialists and geriatric nurses. According to the August 2025 U.S. Bureau of Labor Statistics data, the overall employment of nurse anesthetists, nurse midwives and NPs is projected to grow 35% from 2024 to 2034, with 32,700 openings forecasted annually.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Medical Services industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #89, which places it in the top 36% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust 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 is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Underperforms Sector & S&P 500
The Medical Services Industry has lagged its sector and the S&P 500 over the past year. The stocks in this industry have collectively gained 12% compared with the Medical sector’s 13.5% growth. The S&P 500 composite has risen 21% in the same period.
1-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 16.63X compared with the S&P 500’s 20.39X and the sector’s 21.98X.
Over the last five years, the industry has traded as high as 18.95X, as low as 13.22X and at the median of 15.27X, as the charts below show.
Price-to-Earnings Forward 12 Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward 12 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.
CareDx: Renowned precision medicine company, CareDx specializes in advancing care in transplant, specialty oncology and cell therapy. The company’s portfolio spans non-invasive molecular testing, clinical practice management software, AI-powered data and analytics tools and patient support solutions designed to connect diagnostic insight, clinical workflow and patient engagement. CareDx’s total revenues increased 52% in the second quarter of 2026, supported by 17% growth in Testing volumes.
CareDx sports a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for the company’s 2026 earnings calls for a surge of 105.2%, with revenues expected to increase 30.4%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: CDNA
Image Source: Zacks Investment Research
BrightSpring: The company is one of the largest independent providers of home and community-based health services in the United States, providing both pharmacy and provider services. With a focus on Senior and Specialty patients, BrightSpring provides services in lower-cost home and community settings largely to Medicare, Medicaid and commercially insured populations. In the second quarter of 2026, total revenues grew 23% year over year, and adjusted EBITDA increased 44% from the year-ago quarter.
BrightSpring sports a Zacks Rank #1 at present. For 2026, the Zacks Consensus Estimate for the company’s earnings implies a surge of 82%, while revenues are expected to grow 18.1%.
Price & Consensus: BTSG
Image Source: Zacks Investment Research
PACS Group: Renowned post-acute healthcare company, PACS Group delivers high-quality skilled nursing care through a portfolio of independently operated facilities. The company has driven significant historical growth by acquiring underperforming long-term custodial care skilled nursing facilities and converting them into higher-acuity, higher-value short-term transitional care facilities. In the second quarter of 2026, PACS Group delivered 9.1% year-over-year growth in revenues, while adjusted EBITDA grew 25% compared with the prior-year quarter.
PACS Group presently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the company’s 2026 earnings indicates an 82% jump on revenue growth of 18.1%.
Price & Consensus: PACS
Image Source: Zacks Investment Research