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Buy 5 Medical Devices Stocks for a Stable Portfolio in 2024
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The Medical Instruments industry is highly fragmented, with participants engaged in research and development (R&D) in therapeutic areas. The industry has been witnessing a gradual transition from remote healthcare and contactless services during the pandemic to its original space of point-of-care testing, heavy as well as minimally invasive implants, elective procedures, and so on and so forth.
The medical instruments space has been benefiting from the ongoing merger and acquisition trend. The smaller and mid-sized industry players have been trying to compete with the big shots through consolidation. This trend is more visible after the pandemic-led downturn. The big players are also attempting to enter new markets by acquiring niche products.
Moreover, since the beginning of 2023, this industry has been witnessing massive adoption of artificial intelligence and the Internet of Medical Things in the form of digital healthcare options in hospitals and other healthcare settings. Digital enhancement, while optimizing costs, proves to be better for clinical outcomes.
With an increase in the adoption of digital platforms within the medical device space, robotic surgeries, big-data analytics, bioprinting, 3D printing, electronic health records, predictive analytics, real-time alerting and revenue cycle management services are gaining prominence in the United States.
However, the Medical Instruments players are suffering from logistical challenges and higher unit costs. The pandemic-led devastation of the global supply-chain management system and the effects of monetary policy tightening by the Fed to combat a record-high inflation rate and the withdrawal of fiscal support amid high debt are negatively impacting the industry.
The Zacks defined Medical Instruments industry has rallied 16.9% in the past year and 9.3% year to date, respectively. Since the Medical Instruments industry ranks within the top 25% of Zacks Ranked industries, we expect it to outperform the market over the next three to six months.
Our Top Picks
We have narrowed our search to five Medical Instruments stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Artivion Inc. (AORT - Free Report) is a medical device company. AORT is focused on developing simple, elegant solutions for cardiac and vascular surgeons. AORT’s group of products include aortic stents and stent-grafts, prosthetic heart valves, cryopreserved cardiac and vascular allografts and surgical sealants.
Zacks Rank #1 Artivion has an expected revenue and earnings growth rate of 9.9% and 30%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
TransMedics Group Inc. (TMDX - Free Report) is a commercial-stage medical technology company. TMDX is engaged in transforming organ transplant therapy for end-stage organ failure patients. TMDX offers Organ Care System, an integrated, compact, portable preservation technology that addresses the unmet need for organs for transplantation.
Zacks Rank #1 TransMedics Group has an expected revenue and earnings growth rate of 52% and 77.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
DexCom Inc. (DXCM - Free Report) has benefited from impressive contribution from the Sensor segment, and domestic and international revenue growth. DXCM has solid prospects in alternative markets. DXCM made continued advancements with respect to key strategic objectives and ended the quarter with new patient additions. DXCM’s slew of tie-ups and buyouts are encouraging. A solid international foothold and robust product portfolio augur well. A strong solvency position is an added plus.
Zacks Rank #2 DexCom has an expected revenue and earnings growth rate of 19% and 15.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past seven days.
Edwards Lifesciences Corp. (EW - Free Report) exited 2023 with substantial growth across each of its four product groups. EW is committed to advancing its leadership in surgical structural heart therapies. The strategic spin-off of Critical Care aims to boost EW’s R&D and innovations and enable a sharpened focus on structural heart disease.
Within TMTT, the ongoing global expansion of the PASCAL Precision platform and the European launch of the EVOQUE system are hailed as significant milestones. The SAPIEN 3 Ultra RESILIA platform also continues EW’s strong uptake in the United States.
Zacks Rank #2 Edwards Lifesciences has an expected revenue and earnings growth rate of 8.6% and 10%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 30 days.
Shockwave Medical Inc. (SWAV - Free Report) exhibited significant revenue growth in 2023. Expansion in gross margin is encouraging. SWAV is optimistic about the sustained clinical acceptance and penetration of Intravascular Lithotripsy (IVL), as evident from its strong demand in 2023.
The results were driven by the increasing adoption of coronary IVL in the United States. The introduction of the coronary product, Shockwave C2, in the United States, and the higher adoption of Shockwave products have been some of the highlights. A solid solvency position is another positive for SWAV.
Zacks Rank #2 Shockwave Medical has an expected revenue and earnings growth rate of 26.1% and 27%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 22% over the past 30 days.
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Buy 5 Medical Devices Stocks for a Stable Portfolio in 2024
The Medical Instruments industry is highly fragmented, with participants engaged in research and development (R&D) in therapeutic areas. The industry has been witnessing a gradual transition from remote healthcare and contactless services during the pandemic to its original space of point-of-care testing, heavy as well as minimally invasive implants, elective procedures, and so on and so forth.
The medical instruments space has been benefiting from the ongoing merger and acquisition trend. The smaller and mid-sized industry players have been trying to compete with the big shots through consolidation. This trend is more visible after the pandemic-led downturn. The big players are also attempting to enter new markets by acquiring niche products.
Moreover, since the beginning of 2023, this industry has been witnessing massive adoption of artificial intelligence and the Internet of Medical Things in the form of digital healthcare options in hospitals and other healthcare settings. Digital enhancement, while optimizing costs, proves to be better for clinical outcomes.
With an increase in the adoption of digital platforms within the medical device space, robotic surgeries, big-data analytics, bioprinting, 3D printing, electronic health records, predictive analytics, real-time alerting and revenue cycle management services are gaining prominence in the United States.
However, the Medical Instruments players are suffering from logistical challenges and higher unit costs. The pandemic-led devastation of the global supply-chain management system and the effects of monetary policy tightening by the Fed to combat a record-high inflation rate and the withdrawal of fiscal support amid high debt are negatively impacting the industry.
The Zacks defined Medical Instruments industry has rallied 16.9% in the past year and 9.3% year to date, respectively. Since the Medical Instruments industry ranks within the top 25% of Zacks Ranked industries, we expect it to outperform the market over the next three to six months.
Our Top Picks
We have narrowed our search to five Medical Instruments stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the past 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Artivion Inc. (AORT - Free Report) is a medical device company. AORT is focused on developing simple, elegant solutions for cardiac and vascular surgeons. AORT’s group of products include aortic stents and stent-grafts, prosthetic heart valves, cryopreserved cardiac and vascular allografts and surgical sealants.
Zacks Rank #1 Artivion has an expected revenue and earnings growth rate of 9.9% and 30%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
TransMedics Group Inc. (TMDX - Free Report) is a commercial-stage medical technology company. TMDX is engaged in transforming organ transplant therapy for end-stage organ failure patients. TMDX offers Organ Care System, an integrated, compact, portable preservation technology that addresses the unmet need for organs for transplantation.
Zacks Rank #1 TransMedics Group has an expected revenue and earnings growth rate of 52% and 77.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
DexCom Inc. (DXCM - Free Report) has benefited from impressive contribution from the Sensor segment, and domestic and international revenue growth. DXCM has solid prospects in alternative markets. DXCM made continued advancements with respect to key strategic objectives and ended the quarter with new patient additions. DXCM’s slew of tie-ups and buyouts are encouraging. A solid international foothold and robust product portfolio augur well. A strong solvency position is an added plus.
Zacks Rank #2 DexCom has an expected revenue and earnings growth rate of 19% and 15.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past seven days.
Edwards Lifesciences Corp. (EW - Free Report) exited 2023 with substantial growth across each of its four product groups. EW is committed to advancing its leadership in surgical structural heart therapies. The strategic spin-off of Critical Care aims to boost EW’s R&D and innovations and enable a sharpened focus on structural heart disease.
Within TMTT, the ongoing global expansion of the PASCAL Precision platform and the European launch of the EVOQUE system are hailed as significant milestones. The SAPIEN 3 Ultra RESILIA platform also continues EW’s strong uptake in the United States.
Zacks Rank #2 Edwards Lifesciences has an expected revenue and earnings growth rate of 8.6% and 10%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 30 days.
Shockwave Medical Inc. (SWAV - Free Report) exhibited significant revenue growth in 2023. Expansion in gross margin is encouraging. SWAV is optimistic about the sustained clinical acceptance and penetration of Intravascular Lithotripsy (IVL), as evident from its strong demand in 2023.
The results were driven by the increasing adoption of coronary IVL in the United States. The introduction of the coronary product, Shockwave C2, in the United States, and the higher adoption of Shockwave products have been some of the highlights. A solid solvency position is another positive for SWAV.
Zacks Rank #2 Shockwave Medical has an expected revenue and earnings growth rate of 26.1% and 27%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 22% over the past 30 days.