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3 Soaring MedTech Stocks That Might Lose Ground in 2021
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The year 2020 has been a brutal reminder of how fragile the world is when faced with terrifying uncertainty. As if the resurgence in COVID-19 cases was not enough, the news of a much stronger strain of the virus has again thrown a host of new challenges to the economy and world at large. The long-drawn deliberation regarding the stimulus package and reinforcement of quarantine measures have not only resulted in further market volatility but also slowed down job market recovery. This scenario has left market watchers quite jittery.
Although there is a glimmer of hope for 2021 as FDA granted emergency use authorization (EUA) to not just one but two coronavirus vaccines — Pfizer and BioNTech, and Moderna earlier this month, it is yet to be assessed how everything pans out next year.
MedTech at a Glance: 2020 and Beyond
Amid this pandemic, MedTech emerged as a resilient and bankable sector on the back of key catalysts, which will continue to drive its growth well into 2021.
Digital health (telemedicine and artificial intelligence) played the most crucial and significant role in driving the sector’s performance in 2020, and is well likely to sustain this momentum in 2021.
The commencement of vaccines distribution in no way is going to undermine the importance of diagnostic testing next year. Despite the market volatility, the diagnostic testing business for COVID-19 is rapidly evolving based on the testing requirements worldwide. Hence, companies like QIAGEN (QGEN - Free Report) and Abbott Laboratories (ABT - Free Report) are highly likely to continue their bullish run well into 2021.
Further, thanks to the pandemic, a change in business models has been witnessed in 2020 as companies are leaning toward virtualized, remote-operated business models for medical care. The trend is likely to continue in 2021. Moreover, elective procedures (which put a significant dent on MedTech’s revenues in the first half of 2020) have started to show signs of considerable recovery and is likely to improve further in the coming year.
3 MedTech Stocks: A Rough Ride Ahead
The aforementioned factors have encouraged investors to capitalize on the MedTech space amid this crisis. However, we will take a look at three stocks from this space, which gained tremendously to date, and as to whether they will be capable of sustaining their bull run through 2021.
Presently, these three companies carry a Zacks Rank #4 (Sell), and consequently warrants a cautious approach as investors rethink their portfolio management strategies.
BioLife Solutions, Inc. (BLFS - Free Report) : Despite the challenges encountered due to the COVID-19 pandemic, BioLife Solutions has exhibited growth courtesy of strong execution of strategies in place. This has led to the company delivering year-to-date gain of 149.9%, thereby resulting it to hit market capitalization of $1.33 billion.
However, there are certain lingering headwinds that might weigh on the stock’s performance in 2021. Resurgence in cases will adversely impact in-person sales meetings that can lead to lower automated thaw revenue and evo cold chain management subscription revenues. Further, delay in approvals for large capital equipment purchases and travel and on-site visitor restrictions at customer and prospect sites can also hamper the stock’s performance.
The Zacks Consensus Estimate for 2021 earnings has moved south by 66.7% in the past 60 days to one penny.
STAAR Surgical Company (STAA - Free Report) : Record level of quarterly sales (third-quarter 2020), strong presence, advancement in the pipeline of new products for the United States and Europe, and growing market share in the Asia-Pacific market led STAAR Surgical to gain 119.8% on a year-to-date basis, resulting in a market capitalization of $3.56 billion.
However, the company’s presence in India and Middle East markets continues to remain challenged due to the effects of the pandemic. During third-quarter 2020, the company saw each of these markets down more than 50% in ICL units from the year-ago period. With the pandemic showing no signs of fading any time soon, the sluggishness in these two markets can weigh on the stock’s performance in the next year.
The Zacks Consensus Estimate for 2021 earnings has moved south by 10.2% in the past 60 days to 53 cents per share. The company’s earnings yield is pegged at 0.4% lower than the industry’s 2.9%.
TG Therapeutics, Inc. (TGTX - Free Report) : Favorable results from clinical trials provided a boost to TG Therapeutics that resulted in a year-to-date gain of 363.9%, leading to a market capitalization of $7.09 billion. However, as a biopharmaceutical company with a limited operating history, TG Therapeutics has been unable to generate any revenues from drug sales. Also, with a track record of substantial operating losses, it is expected that the company might continue to incur such losses in the near term. Further, the ongoing pandemic and the restrictions that come with it might cause a delay in ongoing and future clinical trials.
The Zacks Consensus Estimate for the company’s 2021 bottom line is pegged at a loss of $1.87 per share. Moreover, the company’s historical growth rate stands at a negative of 264%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
Image: Bigstock
3 Soaring MedTech Stocks That Might Lose Ground in 2021
The year 2020 has been a brutal reminder of how fragile the world is when faced with terrifying uncertainty. As if the resurgence in COVID-19 cases was not enough, the news of a much stronger strain of the virus has again thrown a host of new challenges to the economy and world at large. The long-drawn deliberation regarding the stimulus package and reinforcement of quarantine measures have not only resulted in further market volatility but also slowed down job market recovery. This scenario has left market watchers quite jittery.
Although there is a glimmer of hope for 2021 as FDA granted emergency use authorization (EUA) to not just one but two coronavirus vaccines — Pfizer and BioNTech, and Moderna earlier this month, it is yet to be assessed how everything pans out next year.
MedTech at a Glance: 2020 and Beyond
Amid this pandemic, MedTech emerged as a resilient and bankable sector on the back of key catalysts, which will continue to drive its growth well into 2021.
Digital health (telemedicine and artificial intelligence) played the most crucial and significant role in driving the sector’s performance in 2020, and is well likely to sustain this momentum in 2021.
The commencement of vaccines distribution in no way is going to undermine the importance of diagnostic testing next year. Despite the market volatility, the diagnostic testing business for COVID-19 is rapidly evolving based on the testing requirements worldwide. Hence, companies like QIAGEN (QGEN - Free Report) and Abbott Laboratories (ABT - Free Report) are highly likely to continue their bullish run well into 2021.
Further, thanks to the pandemic, a change in business models has been witnessed in 2020 as companies are leaning toward virtualized, remote-operated business models for medical care. The trend is likely to continue in 2021. Moreover, elective procedures (which put a significant dent on MedTech’s revenues in the first half of 2020) have started to show signs of considerable recovery and is likely to improve further in the coming year.
3 MedTech Stocks: A Rough Ride Ahead
The aforementioned factors have encouraged investors to capitalize on the MedTech space amid this crisis. However, we will take a look at three stocks from this space, which gained tremendously to date, and as to whether they will be capable of sustaining their bull run through 2021.
Presently, these three companies carry a Zacks Rank #4 (Sell), and consequently warrants a cautious approach as investors rethink their portfolio management strategies.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BioLife Solutions, Inc. (BLFS - Free Report) : Despite the challenges encountered due to the COVID-19 pandemic, BioLife Solutions has exhibited growth courtesy of strong execution of strategies in place. This has led to the company delivering year-to-date gain of 149.9%, thereby resulting it to hit market capitalization of $1.33 billion.
However, there are certain lingering headwinds that might weigh on the stock’s performance in 2021. Resurgence in cases will adversely impact in-person sales meetings that can lead to lower automated thaw revenue and evo cold chain management subscription revenues. Further, delay in approvals for large capital equipment purchases and travel and on-site visitor restrictions at customer and prospect sites can also hamper the stock’s performance.
The Zacks Consensus Estimate for 2021 earnings has moved south by 66.7% in the past 60 days to one penny.
STAAR Surgical Company (STAA - Free Report) : Record level of quarterly sales (third-quarter 2020), strong presence, advancement in the pipeline of new products for the United States and Europe, and growing market share in the Asia-Pacific market led STAAR Surgical to gain 119.8% on a year-to-date basis, resulting in a market capitalization of $3.56 billion.
However, the company’s presence in India and Middle East markets continues to remain challenged due to the effects of the pandemic. During third-quarter 2020, the company saw each of these markets down more than 50% in ICL units from the year-ago period. With the pandemic showing no signs of fading any time soon, the sluggishness in these two markets can weigh on the stock’s performance in the next year.
The Zacks Consensus Estimate for 2021 earnings has moved south by 10.2% in the past 60 days to 53 cents per share. The company’s earnings yield is pegged at 0.4% lower than the industry’s 2.9%.
TG Therapeutics, Inc. (TGTX - Free Report) : Favorable results from clinical trials provided a boost to TG Therapeutics that resulted in a year-to-date gain of 363.9%, leading to a market capitalization of $7.09 billion. However, as a biopharmaceutical company with a limited operating history, TG Therapeutics has been unable to generate any revenues from drug sales. Also, with a track record of substantial operating losses, it is expected that the company might continue to incur such losses in the near term. Further, the ongoing pandemic and the restrictions that come with it might cause a delay in ongoing and future clinical trials.
The Zacks Consensus Estimate for the company’s 2021 bottom line is pegged at a loss of $1.87 per share. Moreover, the company’s historical growth rate stands at a negative of 264%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
Start Your Access to the New Zacks Top 10 Stocks >>