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3 Beaten-Down MedTech Stocks Poised for a Turnaround in 2023
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This year, as the broader economy gradually overcame the pandemic-induced uncertainties, new challenges started cropping up. Over the past few months, supply-chain headwinds and inflationary pressures are hampering operations across industries.
Market watchers are currently pessimistic about the stock market, which is expected to witness a slowdown in 2023 amid the impending prospects of a recession. Per JPMorgan Chase, rising interest rates, record inflation, geopolitical pressure and other factors could lead to a recession that will likely wash away the benefits of savings and government aid received during the pandemic.
The Federal Reserve, by increasing its benchmark interest rate to counter inflationary woes, has raised the possibility of a downturn next year. Some experts believe that the Federal Reserve’s bid to contain inflation by increasing interest rate will likely achieve its target but put pressure on the consumer’s wallet and potentially trigger a recession in 2023. The continuing Russia-Ukraine war also does not look promising as it is indicative of a further rise in commodity prices worldwide with an enduring impact. Market watchers are wary of these two factors leading the equity market investment to face another downturn.
Amid the uncertain macroeconomic business environment, investors can turn their attention to a few MedTech stocks that have been holding steady. Investors should consider these fundamentally-sound stocks that are currently trading below their actual potential. Dynatronics Corporation (DYNT - Free Report) , Inogen, Inc. (INGN - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) seem like the right picks.
MedTech in 2022
As 2022 progressed, the overall MedTech sector gradually witnessed a rebound in its operations after a pandemic-battered business environment. However, no sooner had the players overcome the pandemic-induced challenges, the sector was plagued with supply chain-related headwinds stemming from semiconductor chips shortages and the vicious cycle of deteriorating inflationary situation along with aggressive rate hikes.
Going by the industry-wide trend so far, logistical challenges and increasing unit costs are heavily weighing on the profitability of the stocks across the board.
However, amid the gloomy investment market, the MedTech sector holds the potential to provide long-term gains. It is one of the sectors that has held its ground despite being repeatedly battered by pandemic-related challenges.
A notable MedTech player that has been facing supply chain challenges, hospital staffing shortages and slowing hospital admissions is Masimo Corporation (MASI - Free Report) . The company announced its third-quarter 2022 results last month, wherein it registered robust revenue growth despite navigating through a challenging macroeconomic environment.
Given the impending threat of recession induced by various challenges, investors should scoop up stocks that are fundamentally strong but are trading at a cheaper rate.
3 Stocks to Focus on
The market is bracing for a widespread and stretched panic selling of MedTech stocks induced by an uncertain macroeconomic environment, which is likely to drag down prices of fundamentally-strong stocks, making them dirt cheap. Given the fact that such stocks will be available at a cheaper rate, it will be prudent for investors to consider them for long-term benefits.
Listed below are three companies that investors can consider during these trying times.
The first company to consider is Dynatronics, a well-known manufacturer of athletic training, physical therapy, and rehabilitation products. The company, with a Zacks Rank #2 (Buy) and a Value Score of B, announced its first-quarter fiscal 2023 results last month. Management confirmed that the company continues to execute against its differentiated strategy. This led to a sequential increase of Dynatronics’ gross margin from the fourth quarter of fiscal 2022. The fiscal first quarter represented the sixth consecutive quarter of exceeding the market or its baseline net sales expectation set in 2021.
Its P/B ratio was 0.7 compared with the industry’s 2.6. Further, its P/S ratio stands at 0.2 compared with the industry’s 4.1. The stock has lost 36.7% over the past six months compared with the industry’s 5.4% rise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The next company to consider is Inogen, a renowned medical technology company offering innovative respiratory products for use in the homecare setting. The company, with a Zacks Rank #3 (Hold) and Value Score of B, announced its third-quarter 2022 results last month wherein it saw a robust year-over-year uptick in the overall top line as well as rental and sales revenues. Strength in domestic business-to-business was encouraging. On the earnings call, management confirmed that it is making impressive progress against its subscriber strategy, which delivered strong growth and contributed to solid performance in the third quarter. This looks promising for the stock.
Image Source: Zacks Investment Research
Its P/B ratio was 1.4 compared with the industry’s 2.6. Further, its P/S ratio stands at 1.3 compared with the industry’s 4.1. The stock has lost 18.6% over the past six months compared with the industry’s 5.4% rise.
The final company on our list is key medical device solutions provider Avanos. The company, with a Zacks Rank #3 and Value Score of B, announced its third-quarter 2022 results last month, wherein it saw impressive year-over-year improvement in the overall top and bottom lines. The strength exhibited by Avanos’ core Pain Management segment, along with low single-digit growth in Interventional Pain solutions, was also encouraging. The continued strong demand for Digestive Health products and robust sales of NeoMed look promising. The expansion of both margins bodes well.
Its P/B ratio is 0.9 compared with the industry’s 2.6. Further, its P/S ratio stands at 1.5 compared with the industry’s 4.1. The stock has lost 0.7% over the past six months compared with the industry’s 5.4% rise.
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3 Beaten-Down MedTech Stocks Poised for a Turnaround in 2023
This year, as the broader economy gradually overcame the pandemic-induced uncertainties, new challenges started cropping up. Over the past few months, supply-chain headwinds and inflationary pressures are hampering operations across industries.
Market watchers are currently pessimistic about the stock market, which is expected to witness a slowdown in 2023 amid the impending prospects of a recession. Per JPMorgan Chase, rising interest rates, record inflation, geopolitical pressure and other factors could lead to a recession that will likely wash away the benefits of savings and government aid received during the pandemic.
The Federal Reserve, by increasing its benchmark interest rate to counter inflationary woes, has raised the possibility of a downturn next year. Some experts believe that the Federal Reserve’s bid to contain inflation by increasing interest rate will likely achieve its target but put pressure on the consumer’s wallet and potentially trigger a recession in 2023. The continuing Russia-Ukraine war also does not look promising as it is indicative of a further rise in commodity prices worldwide with an enduring impact. Market watchers are wary of these two factors leading the equity market investment to face another downturn.
Amid the uncertain macroeconomic business environment, investors can turn their attention to a few MedTech stocks that have been holding steady. Investors should consider these fundamentally-sound stocks that are currently trading below their actual potential. Dynatronics Corporation (DYNT - Free Report) , Inogen, Inc. (INGN - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) seem like the right picks.
MedTech in 2022
As 2022 progressed, the overall MedTech sector gradually witnessed a rebound in its operations after a pandemic-battered business environment. However, no sooner had the players overcome the pandemic-induced challenges, the sector was plagued with supply chain-related headwinds stemming from semiconductor chips shortages and the vicious cycle of deteriorating inflationary situation along with aggressive rate hikes.
Going by the industry-wide trend so far, logistical challenges and increasing unit costs are heavily weighing on the profitability of the stocks across the board.
However, amid the gloomy investment market, the MedTech sector holds the potential to provide long-term gains. It is one of the sectors that has held its ground despite being repeatedly battered by pandemic-related challenges.
A notable MedTech player that has been facing supply chain challenges, hospital staffing shortages and slowing hospital admissions is Masimo Corporation (MASI - Free Report) . The company announced its third-quarter 2022 results last month, wherein it registered robust revenue growth despite navigating through a challenging macroeconomic environment.
Given the impending threat of recession induced by various challenges, investors should scoop up stocks that are fundamentally strong but are trading at a cheaper rate.
3 Stocks to Focus on
The market is bracing for a widespread and stretched panic selling of MedTech stocks induced by an uncertain macroeconomic environment, which is likely to drag down prices of fundamentally-strong stocks, making them dirt cheap. Given the fact that such stocks will be available at a cheaper rate, it will be prudent for investors to consider them for long-term benefits.
Listed below are three companies that investors can consider during these trying times.
The first company to consider is Dynatronics, a well-known manufacturer of athletic training, physical therapy, and rehabilitation products. The company, with a Zacks Rank #2 (Buy) and a Value Score of B, announced its first-quarter fiscal 2023 results last month. Management confirmed that the company continues to execute against its differentiated strategy. This led to a sequential increase of Dynatronics’ gross margin from the fourth quarter of fiscal 2022. The fiscal first quarter represented the sixth consecutive quarter of exceeding the market or its baseline net sales expectation set in 2021.
Its P/B ratio was 0.7 compared with the industry’s 2.6. Further, its P/S ratio stands at 0.2 compared with the industry’s 4.1. The stock has lost 36.7% over the past six months compared with the industry’s 5.4% rise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The next company to consider is Inogen, a renowned medical technology company offering innovative respiratory products for use in the homecare setting. The company, with a Zacks Rank #3 (Hold) and Value Score of B, announced its third-quarter 2022 results last month wherein it saw a robust year-over-year uptick in the overall top line as well as rental and sales revenues. Strength in domestic business-to-business was encouraging. On the earnings call, management confirmed that it is making impressive progress against its subscriber strategy, which delivered strong growth and contributed to solid performance in the third quarter. This looks promising for the stock.
Image Source: Zacks Investment Research
Its P/B ratio was 1.4 compared with the industry’s 2.6. Further, its P/S ratio stands at 1.3 compared with the industry’s 4.1. The stock has lost 18.6% over the past six months compared with the industry’s 5.4% rise.
The final company on our list is key medical device solutions provider Avanos. The company, with a Zacks Rank #3 and Value Score of B, announced its third-quarter 2022 results last month, wherein it saw impressive year-over-year improvement in the overall top and bottom lines. The strength exhibited by Avanos’ core Pain Management segment, along with low single-digit growth in Interventional Pain solutions, was also encouraging. The continued strong demand for Digestive Health products and robust sales of NeoMed look promising. The expansion of both margins bodes well.
Its P/B ratio is 0.9 compared with the industry’s 2.6. Further, its P/S ratio stands at 1.5 compared with the industry’s 4.1. The stock has lost 0.7% over the past six months compared with the industry’s 5.4% rise.