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The Zacks Analyst Blog Intuitive Surgical, Globus Medical, Glaukos, Veracyte and Inogen
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For Immediate Releases
Chicago, IL – December 12, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include including Intuitive Surgical (ISRG - Free Report) , Globus Medical (GMED - Free Report) , Glaukos (GKOS - Free Report) , Veracyte (VCYT - Free Report) and Inogen (INGN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
5 Medical Device Stocks that Survived 2024 Market Volatility
In 2024, the medical device industry faced significant headwinds, particularly in the U.S. and European markets. It also navigated challenges in China. These issues stem from regulatory bottlenecks, supply-chain disruptions and geopolitical tensions that have reshaped the industry landscape.
Supply-Chain and Inflationary Pressures
Initially triggered by the COVID-19 pandemic, global supply-chain disruptions persisted in 2024. Rising cost of raw materials and semiconductor shortages heavily affected device manufacturing. Inflation in the United States and Europe further compounded the problem, increasing operational expenses and reducing profit margins. Medical device companies have struggled to balance price increases with affordability for healthcare providers.
Geopolitical and Market Challenges in China
China’s medical device market, the second largest globally, encountered unique challenges in 2024. Trade restrictions, coupled with domestic competition from Chinese manufacturers, created a tougher operating environment for foreign firms. Additionally, regulatory shifts emphasizing "localization" have compelled international companies to form joint ventures or risk losing market share.
Outlook for 2025
Looking ahead, these challenges are unlikely to dissipate entirely. Companies may seek streamlined regulatory processes in the United States and Europe, but real change will take years. Supply-chain resilience will require substantial investments in localized manufacturing. In China, navigating regulatory and market complexities will demand strategic partnerships and localization strategies. Meanwhile, chances of a tariff war loom large between the United States and China after Trump joins the White House. This may disrupt supply chain and lead to a rise in the cost of materials.
While innovation remains a bright spot, 2025 is poised to test the adaptability of the medical device industry amid persistent challenges. Here, we discuss five medical device stocks — Intuitive Surgical, Globus Medical, Glaukos, Veracyte and Inogen — that have gained significantly in 2024 despite ongoing challenges. These companies also have favorable fundamentals, which are likely to continue to reap benefits for their investors in 2025. The stocks either sport a Zacks Rank #1 (Strong Buy) or carry a Zacks Rank #2 (Buy). Revenue and earnings estimates also look encouraging.
Sunnyvale, CA-based Intuitive Surgical designs, manufactures and markets the da Vinci surgical system, Ion endoluminal system and related instruments and accessories. The company ended the third quarter on a positive note, beating estimates on both counts. The top line improved year over year, primarily driven by continued growth in the company’s da Vinci procedure volume, coupled with strong Ion procedure growth.
da Vinci system placement was also higher year over year, which should continue to boost procedure volume growth. ISRG’s initiative to increase the pricing of procedures should also continue to aid sales growth. The launch of da Vinci SP in Europe and da Vinci 5 in the U.S. market should drive system placements higher.
However, Intuitive Surgical has witnessed a moderating growth for its bariatric procedure, used to treat patients with morbid obesity and its secondary effects, such as diabetes, in the past few quarters. The company expects weakness in bariatric procedures, along with challenges in China from increasing provincial robotic competition and delayed tenders impacting capital placements, to have had a nearly three percentage point headwind for revenues in 2024. Apart from bariatric procedures, the company expects moderate growth in the mature gynecologic procedure category, which is also likely to adversely impact revenue growth in the upcoming quarters.
ISRG’s earnings growth rate for 2025 is pegged at 14.1%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 17%. ISRG currently carries a Zacks Rank of 2.
Audubon, PA-based Globus Medical is a medical device company that develops and commercializes healthcare solutions for patients with musculoskeletal disorders. The company currently has its sales operations distributed across 51 countries worldwide. GMED is expanding its global presence to address the unmet demand for musculoskeletal devices. The company’s performance continues to be driven by the market growth in the U.S. spine and increasing momentum internationally.
The company witnesses significant synergy while integrating the NuVasive merger and continues to fuel its innovation and launches, positioning it to gain momentum through 2024 and beyond. During the third quarter of 2024, the company launched four new products, which are likely to generate additional revenues in 2025.
However, the musculoskeletal devices industry is characterized by intensifying competitive pricing pressure. Pricing continues to remain a major headwind for Globus Medical. We remain concerned about the pricing scenario as it is likely to be affected by cost containment efforts by governmental healthcare, local hospitals and health systems.
GMED’s earnings growth rate for 2025 is pegged at 16.1%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 6.7%. GMED currently carries a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos, based in San Clemente, CA, is focused on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies designed to treat glaucoma. The strength in the iStent product line and launch of iDose TR during the third quarter augur well. The company also targets NDA submission for its corneal cross-linking therapy, Epioxa, by the end of 2024.
Per management, the performance in the past few quarters reflects solid execution across its global glaucoma and Corneal Health franchises despite persistent pandemic-induced volatility and global headwinds, which is encouraging. Its sustained recovery trends and solid business prospects despite the pandemic-induced uncertainties raise optimism. Apart from the U.S. market, Glaukos is focusing on expanding globally. The company has been developing a sales base and increasing marketing and market access efforts.
Meanwhile, some of the vendors are continuing to experience supply challenges due to labor shortages and disruption. As a result of these supply-chain challenges and current inflationary pressures, Glaukos has experienced higher costs for certain components and raw materials. These supply challenges are likely to continue in the rest of 2024 and early 2025, albeit at a slower pace.
GKOS’ earnings growth rate for 2025 is pegged at 44.4%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 26.3%. GKOS currently carries a Zacks Rank #2.
Veracyte, currently sporting a Zacks Rank of 1, is based in San Francisco, CA. It commercializes a wide range of advanced genomic tests that leverage deep scientific, clinical and machine learning expertise and other capabilities. The company continues to display robust strength in the testing business using its established diagnostic platform.
Affirma’s differentiation is leading to market share gains. The new GRID ROU tool is gaining strong interest from physicians, while the MolDX’s finalization of an expanded local coverage determination for Afirma reinforces the company’s competitive position. The Decipher Prostrate test is also making strides, achieving a ‘Level 1B’ designation in the updated NCCN guidelines and advancing on the reimbursement front.
However, Veracyte is experiencing significant declines in biopharma and other services revenues due to reductions in customer projects, extended sales cycles and overall spending constraints across the industry. The rising cost of materials and operating expenses is likely to continue in 2025, which does not bode well for bottom-line growth.
VCYT’s earnings growth rate for 2025 is pegged at 65.8%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 9.8%.
Goleta, CA-based Inogen develops, manufactures and markets portable oxygen concentrators. The company’s unique direct-to-customer business model is expected to strengthen its business and solidify its foothold in the global long-term oxygen therapy market. Its solid product suite, fueled by continued innovations, is another growth catalyst. Inogen’s buyout of Physio-Assist represents an opportunity to expand its portfolio. Management’s focus on advancing its innovation pipeline with transformative technologies is also promising.
Yet, macroeconomic concerns stemming from the possibility of another public health crisis and a volatile global financial market raise apprehensions. Medicare headwinds continue to bother Inogen. Other issues like forex volatility and stiff competition persist.
INGN’s earnings growth rate for 2025 is pegged at 11.9%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year improvement of 3.9%.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Intuitive Surgical, Globus Medical, Glaukos, Veracyte and Inogen
For Immediate Releases
Chicago, IL – December 12, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include including Intuitive Surgical (ISRG - Free Report) , Globus Medical (GMED - Free Report) , Glaukos (GKOS - Free Report) , Veracyte (VCYT - Free Report) and Inogen (INGN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
5 Medical Device Stocks that Survived 2024 Market Volatility
In 2024, the medical device industry faced significant headwinds, particularly in the U.S. and European markets. It also navigated challenges in China. These issues stem from regulatory bottlenecks, supply-chain disruptions and geopolitical tensions that have reshaped the industry landscape.
Supply-Chain and Inflationary Pressures
Initially triggered by the COVID-19 pandemic, global supply-chain disruptions persisted in 2024. Rising cost of raw materials and semiconductor shortages heavily affected device manufacturing. Inflation in the United States and Europe further compounded the problem, increasing operational expenses and reducing profit margins. Medical device companies have struggled to balance price increases with affordability for healthcare providers.
Geopolitical and Market Challenges in China
China’s medical device market, the second largest globally, encountered unique challenges in 2024. Trade restrictions, coupled with domestic competition from Chinese manufacturers, created a tougher operating environment for foreign firms. Additionally, regulatory shifts emphasizing "localization" have compelled international companies to form joint ventures or risk losing market share.
Outlook for 2025
Looking ahead, these challenges are unlikely to dissipate entirely. Companies may seek streamlined regulatory processes in the United States and Europe, but real change will take years. Supply-chain resilience will require substantial investments in localized manufacturing. In China, navigating regulatory and market complexities will demand strategic partnerships and localization strategies. Meanwhile, chances of a tariff war loom large between the United States and China after Trump joins the White House. This may disrupt supply chain and lead to a rise in the cost of materials.
While innovation remains a bright spot, 2025 is poised to test the adaptability of the medical device industry amid persistent challenges. Here, we discuss five medical device stocks — Intuitive Surgical, Globus Medical, Glaukos, Veracyte and Inogen — that have gained significantly in 2024 despite ongoing challenges. These companies also have favorable fundamentals, which are likely to continue to reap benefits for their investors in 2025. The stocks either sport a Zacks Rank #1 (Strong Buy) or carry a Zacks Rank #2 (Buy). Revenue and earnings estimates also look encouraging.
Sunnyvale, CA-based Intuitive Surgical designs, manufactures and markets the da Vinci surgical system, Ion endoluminal system and related instruments and accessories. The company ended the third quarter on a positive note, beating estimates on both counts. The top line improved year over year, primarily driven by continued growth in the company’s da Vinci procedure volume, coupled with strong Ion procedure growth.
da Vinci system placement was also higher year over year, which should continue to boost procedure volume growth. ISRG’s initiative to increase the pricing of procedures should also continue to aid sales growth. The launch of da Vinci SP in Europe and da Vinci 5 in the U.S. market should drive system placements higher.
However, Intuitive Surgical has witnessed a moderating growth for its bariatric procedure, used to treat patients with morbid obesity and its secondary effects, such as diabetes, in the past few quarters. The company expects weakness in bariatric procedures, along with challenges in China from increasing provincial robotic competition and delayed tenders impacting capital placements, to have had a nearly three percentage point headwind for revenues in 2024. Apart from bariatric procedures, the company expects moderate growth in the mature gynecologic procedure category, which is also likely to adversely impact revenue growth in the upcoming quarters.
ISRG’s earnings growth rate for 2025 is pegged at 14.1%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 17%. ISRG currently carries a Zacks Rank of 2.
Intuitive Surgical, Inc. price | Intuitive Surgical, Inc. Quote
Audubon, PA-based Globus Medical is a medical device company that develops and commercializes healthcare solutions for patients with musculoskeletal disorders. The company currently has its sales operations distributed across 51 countries worldwide. GMED is expanding its global presence to address the unmet demand for musculoskeletal devices. The company’s performance continues to be driven by the market growth in the U.S. spine and increasing momentum internationally.
The company witnesses significant synergy while integrating the NuVasive merger and continues to fuel its innovation and launches, positioning it to gain momentum through 2024 and beyond. During the third quarter of 2024, the company launched four new products, which are likely to generate additional revenues in 2025.
However, the musculoskeletal devices industry is characterized by intensifying competitive pricing pressure. Pricing continues to remain a major headwind for Globus Medical. We remain concerned about the pricing scenario as it is likely to be affected by cost containment efforts by governmental healthcare, local hospitals and health systems.
GMED’s earnings growth rate for 2025 is pegged at 16.1%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 6.7%. GMED currently carries a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical, Inc. price | Globus Medical, Inc. Quote
Glaukos, based in San Clemente, CA, is focused on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies designed to treat glaucoma. The strength in the iStent product line and launch of iDose TR during the third quarter augur well. The company also targets NDA submission for its corneal cross-linking therapy, Epioxa, by the end of 2024.
Per management, the performance in the past few quarters reflects solid execution across its global glaucoma and Corneal Health franchises despite persistent pandemic-induced volatility and global headwinds, which is encouraging. Its sustained recovery trends and solid business prospects despite the pandemic-induced uncertainties raise optimism. Apart from the U.S. market, Glaukos is focusing on expanding globally. The company has been developing a sales base and increasing marketing and market access efforts.
Meanwhile, some of the vendors are continuing to experience supply challenges due to labor shortages and disruption. As a result of these supply-chain challenges and current inflationary pressures, Glaukos has experienced higher costs for certain components and raw materials. These supply challenges are likely to continue in the rest of 2024 and early 2025, albeit at a slower pace.
GKOS’ earnings growth rate for 2025 is pegged at 44.4%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 26.3%. GKOS currently carries a Zacks Rank #2.
Glaukos Corporation price | Glaukos Corporation Quote
Veracyte, currently sporting a Zacks Rank of 1, is based in San Francisco, CA. It commercializes a wide range of advanced genomic tests that leverage deep scientific, clinical and machine learning expertise and other capabilities. The company continues to display robust strength in the testing business using its established diagnostic platform.
Affirma’s differentiation is leading to market share gains. The new GRID ROU tool is gaining strong interest from physicians, while the MolDX’s finalization of an expanded local coverage determination for Afirma reinforces the company’s competitive position. The Decipher Prostrate test is also making strides, achieving a ‘Level 1B’ designation in the updated NCCN guidelines and advancing on the reimbursement front.
However, Veracyte is experiencing significant declines in biopharma and other services revenues due to reductions in customer projects, extended sales cycles and overall spending constraints across the industry. The rising cost of materials and operating expenses is likely to continue in 2025, which does not bode well for bottom-line growth.
VCYT’s earnings growth rate for 2025 is pegged at 65.8%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year rise of 9.8%.
Veracyte, Inc. price | Veracyte, Inc. Quote
Goleta, CA-based Inogen develops, manufactures and markets portable oxygen concentrators. The company’s unique direct-to-customer business model is expected to strengthen its business and solidify its foothold in the global long-term oxygen therapy market. Its solid product suite, fueled by continued innovations, is another growth catalyst. Inogen’s buyout of Physio-Assist represents an opportunity to expand its portfolio. Management’s focus on advancing its innovation pipeline with transformative technologies is also promising.
Yet, macroeconomic concerns stemming from the possibility of another public health crisis and a volatile global financial market raise apprehensions. Medicare headwinds continue to bother Inogen. Other issues like forex volatility and stiff competition persist.
INGN’s earnings growth rate for 2025 is pegged at 11.9%. The Zacks Consensus Estimate for the company’s 2025 revenues indicates a year-over-year improvement of 3.9%.
Inogen, Inc price | Inogen, Inc Quote
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.