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Prescription for Beats: 3 Healthcare Stocks Set to Outperform in Q3
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The third-quarter 2025 earnings season is underway, with several healthcare companies already reporting their results. Early trends reveal multiple growth catalysts, including stronger outpatient demand, higher patient volumes and utilization rates, premium rate increases and rising interest in commercial health plans and tech-driven services. Still, these positives have been partly tempered by escalating medical costs tied to greater utilization and facility occupancy.
Drawing on our proprietary research and market insight, we’ve identified three stocks — Humana Inc. (HUM - Free Report) , Cencora, Inc. (COR - Free Report) and Globus Medical, Inc. (GMED - Free Report) — that appear well-positioned to beat earnings estimates this season.
Q3 Expectations
Before delving into the specifics of what could have impacted third-quarter performance, let's examine the sector forecasts.
The healthcare space is a part of the broader Zacks Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry). According to the latest Earnings Trends report dated Oct. 29, the medical sector is projected to experience a 2.9% decline in earnings for the third quarter, while revenues are anticipated to rise by 9.1%.
Factors at Play for Healthcare Stocks in Q3
The healthcare sector spans an extensive network of industries, from hospitals, medical services and nursing homes to health insurance, pharmaceuticals, medical devices, and outpatient and home healthcare. Fueled by an aging population and growing demand for medical products and services, the sector continues to post solid sales growth.
Still, short-term profitability remains under pressure. Heavy investments in technology and innovation have increased near-term expenses, while rising wages and employee benefits have added to overall cost burdens. Health Maintenance Organizations (HMOs) likely saw declines in Medicaid and Medicare memberships, even as medical costs climbed more than anticipated. Persistent regulatory scrutiny, pricing constraints and ongoing payment reforms have further weighed on margins and investor sentiment. However, growth in higher-margin commercial memberships likely offset part of these challenges.
Patient volumes gained traction in the third quarter, supported by rising ambulatory and specialty care visits. Higher revenue per admission is also likely to have lifted overall top-line performance. Yet, increased utilization came with a trade-off: higher medical and supply costs that are expected to have compressed profit margins.
To counter these cost pressures, several healthcare companies have likely implemented premium rate increases, providing some cushion to earnings. Health insurers may have also benefited from new product launches and advanced digital capabilities. Meanwhile, strong demand for affordable healthcare options and government plan redeterminations likely supported commercial membership gains.
On a brighter note, technological innovation continues to redefine healthcare delivery. AI and automation are streamlining clinical workflows, improving diagnostic accuracy and trimming wasteful spending. These advances are enabling hospitals to optimize operations, reduce patient wait times and deliver more efficient, cost-effective care.
How to Identify Potential Outperformers?
Spotting healthcare stocks poised for an earnings beat is not easy in today’s crowded market. But our proprietary methodology cuts through the noise, pinpointing companies with strong potential to outperform. Backed by in-depth research and market insight, we have leveraged the Zacks Stock Screener to identify top healthcare names that stand out ahead of their earnings releases.
These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass expectations. Our research shows that for stocks with this combination, the chances of an earnings beat are as high as 70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Potential Healthcare Winners
One might start with Louisville, KY-based Humana, which is one of the major healthcare plan providers. It is witnessing strong premium growth, improving cost management and robust performance in its CenterWell unit. It has an Earnings ESP of +4.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for third-quarter revenues is pegged at $31.98 billion, a 9.1% year-over-year growth. The EPS estimate of $2.91 has increased by a penny over the past month. The Zacks Consensus Estimate for third-quarter earnings indicates an 8.6% increase from the year-ago level, while service revenues are expected to have jumped 25.6%. However, the benefit expense ratio is pegged at 90.9%, up from 89.9% a year ago.
It beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 9.6%.
You may also watch Cencora, which is one of the major pharmaceutical services companies. Headquartered in Conshohocken, PA, the company’s September-quarter earnings are expected to have benefited from increased sales of GLP-1 drugs and specialty products and the RCA acquisition. Adjusted operating income from the U.S. Healthcare Solutions business is likely to have jumped 20.5% in the to-be-reported quarter.
The same for International Healthcare Solutions’ adjusted operating income signals 10.8% growth from a year ago. The Zacks Consensus Estimate for Cencora’s fiscal fourth-quarter earnings is pegged at $3.79 per share, which indicates 13.5% year-over-year growth. The consensus mark for revenues of $83.16 billion predicts a 5.2% increase. COR has an Earnings ESP of +0.31% and a Zacks Rank #3.
It beat earnings estimates in all the past four quarters, with an average of 6.2%.
Finally, we have Audubon, PA-based Globus Medical, which is a medical devices company. Rising sales in both the domestic and international markets and the Nevro acquisition are expected to have benefited its third-quarter earnings.The consensus mark for Musculoskeletal Solutions’ net sales indicates 18.1% year-over-year growth. The same for Enabling Technologies signals more than 5% increase.
The Zacks Consensus Estimate for Globus Medical’s bottom line for the to-be-reported quarter is pegged at 79 cents per share, which increased by a penny over the past week. The consensus mark for revenues is pegged at $733.45 million, signaling 17.2% year-over-year growth. GMED has an Earnings ESP of +1.69% and a Zacks Rank #3.
It beat earnings estimates thrice and missed one time in the past four quarters, with an average surprise of 10.8%.
Image: Shutterstock
Prescription for Beats: 3 Healthcare Stocks Set to Outperform in Q3
The third-quarter 2025 earnings season is underway, with several healthcare companies already reporting their results. Early trends reveal multiple growth catalysts, including stronger outpatient demand, higher patient volumes and utilization rates, premium rate increases and rising interest in commercial health plans and tech-driven services. Still, these positives have been partly tempered by escalating medical costs tied to greater utilization and facility occupancy.
Drawing on our proprietary research and market insight, we’ve identified three stocks — Humana Inc. (HUM - Free Report) , Cencora, Inc. (COR - Free Report) and Globus Medical, Inc. (GMED - Free Report) — that appear well-positioned to beat earnings estimates this season.
Q3 Expectations
Before delving into the specifics of what could have impacted third-quarter performance, let's examine the sector forecasts.
The healthcare space is a part of the broader Zacks Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry). According to the latest Earnings Trends report dated Oct. 29, the medical sector is projected to experience a 2.9% decline in earnings for the third quarter, while revenues are anticipated to rise by 9.1%.
Factors at Play for Healthcare Stocks in Q3
The healthcare sector spans an extensive network of industries, from hospitals, medical services and nursing homes to health insurance, pharmaceuticals, medical devices, and outpatient and home healthcare. Fueled by an aging population and growing demand for medical products and services, the sector continues to post solid sales growth.
Still, short-term profitability remains under pressure. Heavy investments in technology and innovation have increased near-term expenses, while rising wages and employee benefits have added to overall cost burdens. Health Maintenance Organizations (HMOs) likely saw declines in Medicaid and Medicare memberships, even as medical costs climbed more than anticipated. Persistent regulatory scrutiny, pricing constraints and ongoing payment reforms have further weighed on margins and investor sentiment. However, growth in higher-margin commercial memberships likely offset part of these challenges.
Patient volumes gained traction in the third quarter, supported by rising ambulatory and specialty care visits. Higher revenue per admission is also likely to have lifted overall top-line performance. Yet, increased utilization came with a trade-off: higher medical and supply costs that are expected to have compressed profit margins.
To counter these cost pressures, several healthcare companies have likely implemented premium rate increases, providing some cushion to earnings. Health insurers may have also benefited from new product launches and advanced digital capabilities. Meanwhile, strong demand for affordable healthcare options and government plan redeterminations likely supported commercial membership gains.
On a brighter note, technological innovation continues to redefine healthcare delivery. AI and automation are streamlining clinical workflows, improving diagnostic accuracy and trimming wasteful spending. These advances are enabling hospitals to optimize operations, reduce patient wait times and deliver more efficient, cost-effective care.
How to Identify Potential Outperformers?
Spotting healthcare stocks poised for an earnings beat is not easy in today’s crowded market. But our proprietary methodology cuts through the noise, pinpointing companies with strong potential to outperform. Backed by in-depth research and market insight, we have leveraged the Zacks Stock Screener to identify top healthcare names that stand out ahead of their earnings releases.
These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass expectations. Our research shows that for stocks with this combination, the chances of an earnings beat are as high as 70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Potential Healthcare Winners
One might start with Louisville, KY-based Humana, which is one of the major healthcare plan providers. It is witnessing strong premium growth, improving cost management and robust performance in its CenterWell unit. It has an Earnings ESP of +4.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for third-quarter revenues is pegged at $31.98 billion, a 9.1% year-over-year growth. The EPS estimate of $2.91 has increased by a penny over the past month. The Zacks Consensus Estimate for third-quarter earnings indicates an 8.6% increase from the year-ago level, while service revenues are expected to have jumped 25.6%. However, the benefit expense ratio is pegged at 90.9%, up from 89.9% a year ago.
It beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 9.6%.
Humana Inc. Price and EPS Surprise
Humana Inc. price-eps-surprise | Humana Inc. Quote
You may also watch Cencora, which is one of the major pharmaceutical services companies. Headquartered in Conshohocken, PA, the company’s September-quarter earnings are expected to have benefited from increased sales of GLP-1 drugs and specialty products and the RCA acquisition. Adjusted operating income from the U.S. Healthcare Solutions business is likely to have jumped 20.5% in the to-be-reported quarter.
The same for International Healthcare Solutions’ adjusted operating income signals 10.8% growth from a year ago. The Zacks Consensus Estimate for Cencora’s fiscal fourth-quarter earnings is pegged at $3.79 per share, which indicates 13.5% year-over-year growth. The consensus mark for revenues of $83.16 billion predicts a 5.2% increase. COR has an Earnings ESP of +0.31% and a Zacks Rank #3.
It beat earnings estimates in all the past four quarters, with an average of 6.2%.
Cencora, Inc. Price and EPS Surprise
Cencora, Inc. price-eps-surprise | Cencora, Inc. Quote
Finally, we have Audubon, PA-based Globus Medical, which is a medical devices company. Rising sales in both the domestic and international markets and the Nevro acquisition are expected to have benefited its third-quarter earnings.The consensus mark for Musculoskeletal Solutions’ net sales indicates 18.1% year-over-year growth. The same for Enabling Technologies signals more than 5% increase.
The Zacks Consensus Estimate for Globus Medical’s bottom line for the to-be-reported quarter is pegged at 79 cents per share, which increased by a penny over the past week. The consensus mark for revenues is pegged at $733.45 million, signaling 17.2% year-over-year growth. GMED has an Earnings ESP of +1.69% and a Zacks Rank #3.
It beat earnings estimates thrice and missed one time in the past four quarters, with an average surprise of 10.8%.
Globus Medical, Inc. Price and EPS Surprise
Globus Medical, Inc. price-eps-surprise | Globus Medical, Inc. Quote