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3 Beaten-Down MedTech Stocks Poised for a Turnaround in 2024
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In 2023, the global economy experienced significant fluctuations. During the initial months, even with concerns of a recession, investments in global equity markets spanning both crucial and discretionary sectors rebounded as the pandemic's end was officially announced. Various countries implemented bold fiscal stimuli and relief initiatives to spur economic growth, positively impacting investment trends globally.
However, as the year progressed, the investment landscape faced challenges due to escalating geopolitical tensions and an energy crisis, leading to increased inflation. These factors significantly hindered economic expansion in many regions worldwide.
However, the indispensable nature of the healthcare industry makes it an ever-growing industry. An emerging trend currently aiding the MedTech sector is the latest surge in artificial intelligence (AI), which is likely to provide a significant growth prospect for this resilient sector. Increasing adoption of telehealth, remote monitoring and cloud management services are likely to be the other drivers for the broader MedTech sector.
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. DaVita Inc. (DVA - Free Report) , GE HealthCare Technologies Inc. (GEHC - Free Report) and Hologic, Inc. (HOLX - Free Report) seem like the right picks.
MedTech in 2023
As 2023 progressed, the overall MedTech sector gradually witnessed impacts on its operations due to post-pandemic headwinds, inflation, high cost of capital and market volatility. 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, the MedTech sector, being one of the early adopters of AI, has been gradually witnessing a turnaround. AI's predictive capabilities make it easier for doctors and other healthcare providers to detect and diagnose diseases more quickly. This gives them more time with patients, thus improving patients’ satisfaction and health outcomes. Per a report by Precedence Research, the global AI in the healthcare market was estimated at $15.1 billion in 2022 and is anticipated to surpass around $187.95 billion by 2030 at a CAGR of 37%.
Amid the gradually transforming 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 and other macroeconomic uncertainties.
A notable MedTech player that has hopped onto the AI bandwagon is key global healthcare technology player, Medtronic plc (MDT - Free Report) . This month, MDT entered into a definitive agreement to expand its partnership with Cosmo Intelligent Medical Devices, a subsidiary of Cosmo Pharmaceuticals. This strategic collaboration advances the use of AI in endoscopic care and strengthens Medtronic's leadership in AI-integrated healthcare solutions.
Given the impending AI revolution and continued innovations in patient monitoring within the MedTech sector, investors should scoop up stocks that are fundamentally strong but are currently trading at a cheaper rate.
3 Stocks to Focus on
The market is bracing for a widespread utilization of AI and other technology-enabled services. These have the potential to drive up the future prices of MedTech stocks. Given the fact that such stocks are currently available at a cheaper rate, it will be prudent for investors to consider them for long-term benefits.
Listed below are three companies that have the potential to turn profitable for investors.
The first company to consider is DaVita, a renowned global comprehensive kidney care provider. The company, with a Zacks Rank #1 (Strong Buy) and a Value Score of A, announced its third-quarter 2023 results last month. DVA registered an uptick in its overall top line and dialysis patient service and Other revenues during the period. The sequential improvement of DaVita’s bottom line was also recorded. The opening of several dialysis centers within the United States and overseas was promising.
Image Source: Zacks Investment Research
The company’s P/E ratio of 12.9 compares with the industry’s 20.6. Further, its P/S ratio stands at 0.8 compared with the industry’s 1.4. The stock has gained 8.5% over the past three months compared with the industry’s 10.7% rise. You can see the complete list of today’s Zacks #1 Rank stocks here.
The next company to consider is GE HealthCare, a well-known global medical technology, pharmaceutical diagnostics and digital solutions provider. Last month, GEHC, with a Zacks Rank #3 (Hold) and Value Score of B, announced the release of a new, all-in-one platform of AI apps to support clinicians with breast cancer detection and improved workflow productivity called MyBreastAI Suite. With this initial release, MyBreastAI Suite integrates three AI applications from iCAD, including ProFound AI for DBT, SecondLook for 2D Mammography and PowerLook Density Assessment to help support early detection and improve patient outcomes, as well as help radiology departments improve operational productivity.
Image Source: Zacks Investment Research
GE HealthCare’s P/E ratio of 20.5 compares with the industry’s 33.2. Further, its P/S ratio stands at 1.8 compared with the industry’s 1.9. The stock has gained 29.2% over the past year compared with the industry’s 30.6% rise.
The final company on our list is key global medical technology player, Hologic. The company, with a Zacks Rank #3 and a Value Score of B, announced last month that it will be showcasing several recent developments in next-generation AI solutions at the Scientific Assembly and Annual Meeting of the Radiological Society of North America from Nov 26 to 30. Per management, HOLX is building upon its innovation in breast health with a new AI-based solution that is designed to support the radiologist with improved cancer detection and provide a more efficient workflow.
Image Source: Zacks Investment Research
Hologic’s P/E ratio of 17.8 compares with the industry’s 25.1. Further, its PEG ratio stands at 2.3 compared with the industry’s 2.6. The stock has gained 1.5% over the past three months compared with the industry’s 9.2% rise.
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3 Beaten-Down MedTech Stocks Poised for a Turnaround in 2024
In 2023, the global economy experienced significant fluctuations. During the initial months, even with concerns of a recession, investments in global equity markets spanning both crucial and discretionary sectors rebounded as the pandemic's end was officially announced. Various countries implemented bold fiscal stimuli and relief initiatives to spur economic growth, positively impacting investment trends globally.
However, as the year progressed, the investment landscape faced challenges due to escalating geopolitical tensions and an energy crisis, leading to increased inflation. These factors significantly hindered economic expansion in many regions worldwide.
However, the indispensable nature of the healthcare industry makes it an ever-growing industry. An emerging trend currently aiding the MedTech sector is the latest surge in artificial intelligence (AI), which is likely to provide a significant growth prospect for this resilient sector. Increasing adoption of telehealth, remote monitoring and cloud management services are likely to be the other drivers for the broader MedTech sector.
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. DaVita Inc. (DVA - Free Report) , GE HealthCare Technologies Inc. (GEHC - Free Report) and Hologic, Inc. (HOLX - Free Report) seem like the right picks.
MedTech in 2023
As 2023 progressed, the overall MedTech sector gradually witnessed impacts on its operations due to post-pandemic headwinds, inflation, high cost of capital and market volatility. 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, the MedTech sector, being one of the early adopters of AI, has been gradually witnessing a turnaround. AI's predictive capabilities make it easier for doctors and other healthcare providers to detect and diagnose diseases more quickly. This gives them more time with patients, thus improving patients’ satisfaction and health outcomes. Per a report by Precedence Research, the global AI in the healthcare market was estimated at $15.1 billion in 2022 and is anticipated to surpass around $187.95 billion by 2030 at a CAGR of 37%.
Amid the gradually transforming 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 and other macroeconomic uncertainties.
A notable MedTech player that has hopped onto the AI bandwagon is key global healthcare technology player, Medtronic plc (MDT - Free Report) . This month, MDT entered into a definitive agreement to expand its partnership with Cosmo Intelligent Medical Devices, a subsidiary of Cosmo Pharmaceuticals. This strategic collaboration advances the use of AI in endoscopic care and strengthens Medtronic's leadership in AI-integrated healthcare solutions.
Given the impending AI revolution and continued innovations in patient monitoring within the MedTech sector, investors should scoop up stocks that are fundamentally strong but are currently trading at a cheaper rate.
3 Stocks to Focus on
The market is bracing for a widespread utilization of AI and other technology-enabled services. These have the potential to drive up the future prices of MedTech stocks. Given the fact that such stocks are currently available at a cheaper rate, it will be prudent for investors to consider them for long-term benefits.
Listed below are three companies that have the potential to turn profitable for investors.
The first company to consider is DaVita, a renowned global comprehensive kidney care provider. The company, with a Zacks Rank #1 (Strong Buy) and a Value Score of A, announced its third-quarter 2023 results last month. DVA registered an uptick in its overall top line and dialysis patient service and Other revenues during the period. The sequential improvement of DaVita’s bottom line was also recorded. The opening of several dialysis centers within the United States and overseas was promising.
Image Source: Zacks Investment Research
The company’s P/E ratio of 12.9 compares with the industry’s 20.6. Further, its P/S ratio stands at 0.8 compared with the industry’s 1.4. The stock has gained 8.5% over the past three months compared with the industry’s 10.7% rise. You can see the complete list of today’s Zacks #1 Rank stocks here.
The next company to consider is GE HealthCare, a well-known global medical technology, pharmaceutical diagnostics and digital solutions provider. Last month, GEHC, with a Zacks Rank #3 (Hold) and Value Score of B, announced the release of a new, all-in-one platform of AI apps to support clinicians with breast cancer detection and improved workflow productivity called MyBreastAI Suite. With this initial release, MyBreastAI Suite integrates three AI applications from iCAD, including ProFound AI for DBT, SecondLook for 2D Mammography and PowerLook Density Assessment to help support early detection and improve patient outcomes, as well as help radiology departments improve operational productivity.
Image Source: Zacks Investment Research
GE HealthCare’s P/E ratio of 20.5 compares with the industry’s 33.2. Further, its P/S ratio stands at 1.8 compared with the industry’s 1.9. The stock has gained 29.2% over the past year compared with the industry’s 30.6% rise.
The final company on our list is key global medical technology player, Hologic. The company, with a Zacks Rank #3 and a Value Score of B, announced last month that it will be showcasing several recent developments in next-generation AI solutions at the Scientific Assembly and Annual Meeting of the Radiological Society of North America from Nov 26 to 30. Per management, HOLX is building upon its innovation in breast health with a new AI-based solution that is designed to support the radiologist with improved cancer detection and provide a more efficient workflow.
Image Source: Zacks Investment Research
Hologic’s P/E ratio of 17.8 compares with the industry’s 25.1. Further, its PEG ratio stands at 2.3 compared with the industry’s 2.6. The stock has gained 1.5% over the past three months compared with the industry’s 9.2% rise.