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5 MedTech Stocks to Gain in 2021 as Base Business Recovers
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Through the months of the pandemic situation, the fortunes of the MedTech industry swung back and forth between crisis and opportunities. On the one hand, the COVID-19 disaster resulted in significant demand for telemedicine-focused online medical services. Companies in the remote healthcare space saw their stocks rally like never before amid the economic volatility.
On the other hand, the long-drawn deliberation regarding the stimulus packages, enforcement and reinforcement of quarantine measures, and sole focus on COVID-19 support measures have not only resulted in extreme market volatility but also disrupted global supply chain and significantly slowed down the growth of non-COVID MedTech businesses.
MedTech companies with defined segmental division of COVID-19 support products and non-COVID legacy elective products somehow managed to stay afloat. For them, the profit generated from pandemic support compensated the loss incurred from non-emergency business. However, companies with only non-COVID operation saw the decade’s biggest business disaster during these months. Dental, orthopedic and veterinary stocks are some of the examples. Declining hospital and doctors’ office visits along with deferral of procedures significantly pulled the share price of these stocks.
Base Business Revival Begins
Since the first quarter of 2021, with the commencement of elaborate vaccine rollout, the base elective businesses of the MedTech companies have started to show strong signs of recovery. This recovery rate is growing as companies have finally started to meet the pent-up demand following months of suppressed spending. Mainly sectors like cardiac and vascular, neuromodulation, minimally invasive and non-invasive surgeries as well as orthopedic procedures are benefiting from this huge pent-up demand.
Among MedTech stalwarts, Abbott, which recently lowered its 2021 guidance due to considerable reduction in recent and projected COVID-19 diagnostic testing demand on improving pandemic scenario, recorded 6% growth in Base business organic sales in its last-reported first quarter of 2021. Medtronic's last-reported fourth-quarter fiscal 2021 results too reflect a strong recovery in terms of base business.
Orthopedic major Zimmer Biomet (ZBH - Free Report) recently noted that through 2021, it expects to see seasonality in revenues that will resemble pre-COVID trend. Invisalign systems manufacturer and major dental stock Align Technologies (ALGN - Free Report) too has noted about higher sales of Invisalign Clear Aligners on improving shipment volume globally.
With the President’s latest target to complete the vaccine drive by early July, the prospect of a full-fledged economic reopening is getting brighter. Needless to say, the trend of MedTech base business recovery is likely to improve further as the year proceeds.
5 Potential MedTech Gainers of 2021
Along with a booming U.S. economy, driven by the vaccine rollout, the MedTech industry is poised to witness greater growth through the rest of 2021. It is currently a prudent idea to pick solid growth stocks as these companies are financially stable, accruing profits in established markets and have the potential for greater returns amid the post-pandemic market recovery.
National Vision Holdings, Inc. (EYE - Free Report) : The company is currently recording positive comparable store sales in eyeglasses. The contact lens category too is seeing growth in average ticket as contact lens customers are increasingly adopting newer technology lenses that have higher prices -- a trend that we expect to continue. The extension of the partnership with Walmart through 2024 looks encouraging.
This Zacks Rank #1 company has expected earnings and sales growth rates of 19.8% and 17.8%, respectively for 2021. Its long-term expected earnings growth is pegged at 23%. The stock has risen 7.2% year to date.
Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) : In the recent months, within the company’s nucleic acid production business, demand for CleanCap messenger RNA has accelerated in areas like CleanCap reagents, GMP manufacturing services and custom mRNA constructs. Maravai currently expect continued strong demand from its existing COVID-19 CleanCap customers in 2021 and 2022 as they dramatically increase their manufacturing capacity for existing vaccines.
The stock holds a Zacks Rank #1 and has an expected earnings growth rate of 150.4% for 2021. The current return on equity is 283%. The stock has surged 49.8% year to date.
SONOVA HOLDING (SONVY - Free Report) : The company develops, manufactures, and distributes hearing systems for adults and children with hearing impairment. It operates through two segments, Hearing Instruments and Cochlear Implants segments. The company’s recent decision to buy the consumer unit of German headphone and microphone maker, Sennheiser buoys investors’ optimism.
This Zacks Rank #1 company has expected earnings growth rate of 23.5% for fiscal 2022. The stock has risen 38.1% year to date.
SARTORIUS AG (SARTF - Free Report) : As per the company’s first-quarter 2021 update, it had an exceptionally strong start to 2021 and grew substantially in order intake, sales revenues and earnings. This was fueled by strong fundamental growth, additional business from vaccine manufacturers, and acquisitions.
This Zacks Rank #1 stock has an expected earnings and sales growth rate of 70.1% and 43.8% respectively for 2021. The stock has risen 17.2% year to date.
Henry Schein, Inc. (HSIC - Free Report) : The company has been registering improved patient traffic across its businesses leading to strong recovery. The company’s global dental consumable merchandise internal sales saw an uptick in the last-reported first quarter with solid dental consumable merchandise sales growth in the United States, Canada, Australia, New Zealand, Brazil, Asia and throughout most of Europe. Strength in the company’s Henry Schein One portfolio also looks impressive at this moment.
This Zacks Rank #2 (Buy) company has an expected earnings and sales growth rate of 34.3% and 15.9% respectively for 2021. Its long-term expected earnings growth rate is pegged at 11.2%. The stock has risen 16.1% year to date.
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Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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5 MedTech Stocks to Gain in 2021 as Base Business Recovers
Through the months of the pandemic situation, the fortunes of the MedTech industry swung back and forth between crisis and opportunities. On the one hand, the COVID-19 disaster resulted in significant demand for telemedicine-focused online medical services. Companies in the remote healthcare space saw their stocks rally like never before amid the economic volatility.
On the other hand, the long-drawn deliberation regarding the stimulus packages, enforcement and reinforcement of quarantine measures, and sole focus on COVID-19 support measures have not only resulted in extreme market volatility but also disrupted global supply chain and significantly slowed down the growth of non-COVID MedTech businesses.
MedTech companies with defined segmental division of COVID-19 support products and non-COVID legacy elective products somehow managed to stay afloat. For them, the profit generated from pandemic support compensated the loss incurred from non-emergency business. However, companies with only non-COVID operation saw the decade’s biggest business disaster during these months. Dental, orthopedic and veterinary stocks are some of the examples. Declining hospital and doctors’ office visits along with deferral of procedures significantly pulled the share price of these stocks.
Base Business Revival Begins
Since the first quarter of 2021, with the commencement of elaborate vaccine rollout, the base elective businesses of the MedTech companies have started to show strong signs of recovery. This recovery rate is growing as companies have finally started to meet the pent-up demand following months of suppressed spending. Mainly sectors like cardiac and vascular, neuromodulation, minimally invasive and non-invasive surgeries as well as orthopedic procedures are benefiting from this huge pent-up demand.
Among MedTech stalwarts, Abbott, which recently lowered its 2021 guidance due to considerable reduction in recent and projected COVID-19 diagnostic testing demand on improving pandemic scenario, recorded 6% growth in Base business organic sales in its last-reported first quarter of 2021. Medtronic's last-reported fourth-quarter fiscal 2021 results too reflect a strong recovery in terms of base business.
Orthopedic major Zimmer Biomet (ZBH - Free Report) recently noted that through 2021, it expects to see seasonality in revenues that will resemble pre-COVID trend. Invisalign systems manufacturer and major dental stock Align Technologies (ALGN - Free Report) too has noted about higher sales of Invisalign Clear Aligners on improving shipment volume globally.
With the President’s latest target to complete the vaccine drive by early July, the prospect of a full-fledged economic reopening is getting brighter. Needless to say, the trend of MedTech base business recovery is likely to improve further as the year proceeds.
5 Potential MedTech Gainers of 2021
Along with a booming U.S. economy, driven by the vaccine rollout, the MedTech industry is poised to witness greater growth through the rest of 2021. It is currently a prudent idea to pick solid growth stocks as these companies are financially stable, accruing profits in established markets and have the potential for greater returns amid the post-pandemic market recovery.
We have taken the help of the Zacks Stock Screener to zero in on five MedTech stocks with a favorable Zacks Rank and growth parameters. You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.
National Vision Holdings, Inc. (EYE - Free Report) : The company is currently recording positive comparable store sales in eyeglasses. The contact lens category too is seeing growth in average ticket as contact lens customers are increasingly adopting newer technology lenses that have higher prices -- a trend that we expect to continue. The extension of the partnership with Walmart through 2024 looks encouraging.
This Zacks Rank #1 company has expected earnings and sales growth rates of 19.8% and 17.8%, respectively for 2021. Its long-term expected earnings growth is pegged at 23%. The stock has risen 7.2% year to date.
Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) : In the recent months, within the company’s nucleic acid production business, demand for CleanCap messenger RNA has accelerated in areas like CleanCap reagents, GMP manufacturing services and custom mRNA constructs. Maravai currently expect continued strong demand from its existing COVID-19 CleanCap customers in 2021 and 2022 as they dramatically increase their manufacturing capacity for existing vaccines.
The stock holds a Zacks Rank #1 and has an expected earnings growth rate of 150.4% for 2021. The current return on equity is 283%. The stock has surged 49.8% year to date.
SONOVA HOLDING (SONVY - Free Report) : The company develops, manufactures, and distributes hearing systems for adults and children with hearing impairment. It operates through two segments, Hearing Instruments and Cochlear Implants segments. The company’s recent decision to buy the consumer unit of German headphone and microphone maker, Sennheiser buoys investors’ optimism.
This Zacks Rank #1 company has expected earnings growth rate of 23.5% for fiscal 2022. The stock has risen 38.1% year to date.
SARTORIUS AG (SARTF - Free Report) : As per the company’s first-quarter 2021 update, it had an exceptionally strong start to 2021 and grew substantially in order intake, sales revenues and earnings. This was fueled by strong fundamental growth, additional business from vaccine manufacturers, and acquisitions.
This Zacks Rank #1 stock has an expected earnings and sales growth rate of 70.1% and 43.8% respectively for 2021. The stock has risen 17.2% year to date.
Henry Schein, Inc. (HSIC - Free Report) : The company has been registering improved patient traffic across its businesses leading to strong recovery. The company’s global dental consumable merchandise internal sales saw an uptick in the last-reported first quarter with solid dental consumable merchandise sales growth in the United States, Canada, Australia, New Zealand, Brazil, Asia and throughout most of Europe. Strength in the company’s Henry Schein One portfolio also looks impressive at this moment.
This Zacks Rank #2 (Buy) company has an expected earnings and sales growth rate of 34.3% and 15.9% respectively for 2021. Its long-term expected earnings growth rate is pegged at 11.2%. The stock has risen 16.1% year to date.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>