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3 High-Potential MedTech Stocks With More Than 50% Growth YTD
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The more-than-one-and-a-half year-long COVID-19 pandemic has created unprecedented mayhem across the United States. Nevertheless, it presented an opportunity for healthcare companies to dig the best out of it. In particular, the MedTech sector has displayed significant strength since the beginning of 2021 by exhibiting recovery based on the mass vaccination mission.
Even amid the recent surge in the highly transmissible Delta variant that has thrown a set of new nationwide challenges to the investment world, market watchers are currently focused on the MedTech space, recognized as one of the most stable business sectors. Not to forget, the sector showed remarkable resilience last year despite the pandemic-induced disruption. Thus, it would be prudent to capitalize on the space now.
Let us delve deeper.
MedTech Resilience to Continue
The pandemic has transformed the health care infrastructure, with companies’ receptiveness toward virtualized, remote-operated business models for medical care that, in turn, have helped them recover and attain pre-COVID-19 levels.
Rapid developments in artificial intelligence (AI) technology, device connectivity and virtual monitoring have enabled healthcare companies to effectively respond to the growing demand for critical products such as personal protective equipment (PPE) and ventilators. By quickly scaling up R&D and manufacturing efforts, the sector has been making significant efforts in reducing the pressure on healthcare systems.
Additionally, the President recently released a mandate asking federal employees to ensure vaccination and large and small private sector businesses to get their staff fully vaccinated and regularly tested. This is expected to bode well for MedTech stocks by increasing hospital and patient office visits and motivating people to opt for non-COVID elective Medtech procedures.
MedTech Space: Opportunities to Grow
Increasing adoption of telemedicine or the option of digitally availing of medical advice has become a major choice for contactless healthcare services amid surging coronavirus infections. Frost & Sullivan forecasts seven-fold growth in telehealth by 2025 – a five-year compound annual growth rate of 38.2%. This opens up enormous opportunities for the MedTech space.
In terms of digital acceleration, during the fiscal third-quarter earnings update, Walgreens Boots Alliance (WBA - Free Report) noted that Walgreens Find Care platform usage increased to more than 135 million visits, driven mainly by COVID-19 testing and vaccinations. Also, Walgreens Boots completed the nationwide deployment of its SAP S/4HANA front-of-store technology platform.
Also, the longer screen times and the resulting rise in eye fatigue have necessitated the use of vision correction and anti-fatigue glasses. This has enabled optical care companies to capture higher sales of anti-fatigue and blue light canceling lenses, thereby resulting in overall market growth within the MedTech space.
Moreover, the President's latest mandate aimed at curtailing the surge in COVID-19 infections signals a sharp rise in testing. This is expected to help diagnostics companies witness significant growth in the coming months.
Quest Diagnostics Incorporated (DGX - Free Report) recently raised its full-year projection significantly in line with the rise in testing demand. The company also noted that it expects the Delta-driven surge to be stronger than anticipated, with Quest Diagnostics now assuming average volumes of at least 40,000 molecular tests daily for the second half of the year versus the previous guidance of 20,000.
Stocks Gaining More Than 50% YTD
Going by the aforementioned discussions, investors can choose to invest in fundamentally-strong stocks that have shown tremendous promise despite challenging market conditions.
Here are a few MedTech companies with a Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. These stocks scored 50% or more in terms of share price appreciation through 2021. You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical Services, Inc. (WST - Free Report) – The company exited second-quarter 2021 on a strong note with solid organic sales growth in both of its base businesses and improving demand for products related to COVID-19 vaccines. It continues to witness strong uptake of HVP components, including Westar, FluroTec, Envision and NovaPure offerings, and Daikyo’s Crystal Zenith. Moreover, the raised financial outlook for 2021 instills further optimism in the stock.
Image Source: Zacks Investment Research
This Zacks Rank #2 stock has a Growth Score of B. Year to date, shares of the company have surged 50.9% compared with the industry’s growth of 15.3%.
Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) – The company had an incredibly strong first half of 2021. Revenues for the second quarter surged 364.3% year over year driven by robust growth across Nucleic Acid Production and Biologic Safety Testing businesses. The company witnessed continued strong demand for the proprietary CleanCap analogs as COVID-19 vaccine manufacturers scale production. The company entered into a definitive agreement to sell Vector Laboratories -- its Protein Detection business segment -- to Thompson Street Capital Partners, a St. Louis-based private equity firm. The company intends to use its net proceeds from the sale for general corporate purposes, including organic growth investments and potential M&A opportunities.
Image Source: Zacks Investment Research
This Zacks Rank #2 stock has a Growth Score of B. Year to date, shares of the company have surged 68.5% compared with the industry’s 3.2% growth.
Option Care Health, Inc. (OPCH - Free Report) -- Option Care Health reported a solid second quarter while investing in future growth. During the second quarter of 2021, the company completed the BioCure acquisition. The company also recently announced the technology collaboration with AlayaCare -- one of the existing trusted technology partners to co-develop market-leading patient engagement and clinical management software. The company also invested in an additional infusion suite capacity and is aggressively moving to open 10 to 15 other stand-alone infusion centers by the end of 2021. Moreover, the company has raised its full-year 2021 guidance, which is indicative of the continuation of this bullish trend.
Image Source: Zacks Investment Research
This Zacks Rank #2 stock has a Growth Score of A. Year to date, shares of the company have surged 54.2% against the industry’s fall of 34.9%.
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3 High-Potential MedTech Stocks With More Than 50% Growth YTD
The more-than-one-and-a-half year-long COVID-19 pandemic has created unprecedented mayhem across the United States. Nevertheless, it presented an opportunity for healthcare companies to dig the best out of it. In particular, the MedTech sector has displayed significant strength since the beginning of 2021 by exhibiting recovery based on the mass vaccination mission.
Even amid the recent surge in the highly transmissible Delta variant that has thrown a set of new nationwide challenges to the investment world, market watchers are currently focused on the MedTech space, recognized as one of the most stable business sectors. Not to forget, the sector showed remarkable resilience last year despite the pandemic-induced disruption. Thus, it would be prudent to capitalize on the space now.
Let us delve deeper.
MedTech Resilience to Continue
The pandemic has transformed the health care infrastructure, with companies’ receptiveness toward virtualized, remote-operated business models for medical care that, in turn, have helped them recover and attain pre-COVID-19 levels.
Rapid developments in artificial intelligence (AI) technology, device connectivity and virtual monitoring have enabled healthcare companies to effectively respond to the growing demand for critical products such as personal protective equipment (PPE) and ventilators. By quickly scaling up R&D and manufacturing efforts, the sector has been making significant efforts in reducing the pressure on healthcare systems.
Additionally, the President recently released a mandate asking federal employees to ensure vaccination and large and small private sector businesses to get their staff fully vaccinated and regularly tested. This is expected to bode well for MedTech stocks by increasing hospital and patient office visits and motivating people to opt for non-COVID elective Medtech procedures.
MedTech Space: Opportunities to Grow
Increasing adoption of telemedicine or the option of digitally availing of medical advice has become a major choice for contactless healthcare services amid surging coronavirus infections. Frost & Sullivan forecasts seven-fold growth in telehealth by 2025 – a five-year compound annual growth rate of 38.2%. This opens up enormous opportunities for the MedTech space.
In terms of digital acceleration, during the fiscal third-quarter earnings update, Walgreens Boots Alliance (WBA - Free Report) noted that Walgreens Find Care platform usage increased to more than 135 million visits, driven mainly by COVID-19 testing and vaccinations. Also, Walgreens Boots completed the nationwide deployment of its SAP S/4HANA front-of-store technology platform.
Also, the longer screen times and the resulting rise in eye fatigue have necessitated the use of vision correction and anti-fatigue glasses. This has enabled optical care companies to capture higher sales of anti-fatigue and blue light canceling lenses, thereby resulting in overall market growth within the MedTech space.
Moreover, the President's latest mandate aimed at curtailing the surge in COVID-19 infections signals a sharp rise in testing. This is expected to help diagnostics companies witness significant growth in the coming months.
Quest Diagnostics Incorporated (DGX - Free Report) recently raised its full-year projection significantly in line with the rise in testing demand. The company also noted that it expects the Delta-driven surge to be stronger than anticipated, with Quest Diagnostics now assuming average volumes of at least 40,000 molecular tests daily for the second half of the year versus the previous guidance of 20,000.
Stocks Gaining More Than 50% YTD
Going by the aforementioned discussions, investors can choose to invest in fundamentally-strong stocks that have shown tremendous promise despite challenging market conditions.
Here are a few MedTech companies with a Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. These stocks scored 50% or more in terms of share price appreciation through 2021. You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical Services, Inc. (WST - Free Report) – The company exited second-quarter 2021 on a strong note with solid organic sales growth in both of its base businesses and improving demand for products related to COVID-19 vaccines. It continues to witness strong uptake of HVP components, including Westar, FluroTec, Envision and NovaPure offerings, and Daikyo’s Crystal Zenith. Moreover, the raised financial outlook for 2021 instills further optimism in the stock.
This Zacks Rank #2 stock has a Growth Score of B. Year to date, shares of the company have surged 50.9% compared with the industry’s growth of 15.3%.
Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) – The company had an incredibly strong first half of 2021. Revenues for the second quarter surged 364.3% year over year driven by robust growth across Nucleic Acid Production and Biologic Safety Testing businesses. The company witnessed continued strong demand for the proprietary CleanCap analogs as COVID-19 vaccine manufacturers scale production. The company entered into a definitive agreement to sell Vector Laboratories -- its Protein Detection business segment -- to Thompson Street Capital Partners, a St. Louis-based private equity firm. The company intends to use its net proceeds from the sale for general corporate purposes, including organic growth investments and potential M&A opportunities.
This Zacks Rank #2 stock has a Growth Score of B. Year to date, shares of the company have surged 68.5% compared with the industry’s 3.2% growth.
Option Care Health, Inc. (OPCH - Free Report) -- Option Care Health reported a solid second quarter while investing in future growth. During the second quarter of 2021, the company completed the BioCure acquisition. The company also recently announced the technology collaboration with AlayaCare -- one of the existing trusted technology partners to co-develop market-leading patient engagement and clinical management software. The company also invested in an additional infusion suite capacity and is aggressively moving to open 10 to 15 other stand-alone infusion centers by the end of 2021. Moreover, the company has raised its full-year 2021 guidance, which is indicative of the continuation of this bullish trend.
This Zacks Rank #2 stock has a Growth Score of A. Year to date, shares of the company have surged 54.2% against the industry’s fall of 34.9%.