Looking back on medical devices & supplies - specialty stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Globus Medical (NYSE:GMED) and its peers.
The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies, although specialty devices are more niche. The capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers.
The 7 medical devices & supplies - specialty stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.9%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Weakest Q1: Globus Medical (NYSE:GMED)
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Globus Medical reported revenues of $598.1 million, down 1.4% year on year. This print fell short of analysts’ expectations by 4.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates.
Globus Medical achieved the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. Still, the market seems discontent with the results. The stock is down 16.6% since reporting and currently trades at $60.80.
Is now the time to buy Globus Medical? Access our full analysis of the earnings results here, it’s free.
Best Q1: Inspire Medical Systems (NYSE:INSP)
Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE:INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.
Inspire Medical Systems reported revenues of $201.3 million, up 22.7% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
Inspire Medical Systems delivered the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 16.6% since reporting. It currently trades at $132.72.
Is now the time to buy Inspire Medical Systems? Access our full analysis of the earnings results here, it’s free.
Bausch + Lomb (NYSE:BLCO)
With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE:BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.
Bausch + Lomb reported revenues of $1.14 billion, up 3.5% year on year, falling short of analysts’ expectations by 0.7%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and full-year EBITDA guidance missing analysts’ expectations.
As expected, the stock is down 8.8% since the results and currently trades at $12.51.
Read our full analysis of Bausch + Lomb’s results here.
Enovis (NYSE:ENOV)
With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE:ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.
Enovis reported revenues of $558.8 million, up 8.3% year on year. This print was in line with analysts’ expectations. Aside from that, it was a slower quarter as it recorded a significant miss of analysts’ full-year EPS guidance estimates.
The stock is down 2.3% since reporting and currently trades at $33.34.
Read our full, actionable report on Enovis here, it’s free.
Haemonetics (NYSE:HAE)
With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE:HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.
Haemonetics reported revenues of $330.6 million, down 3.7% year on year. This result beat analysts’ expectations by 1%. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ organic revenue estimates but a slight miss of analysts’ full-year EPS guidance estimates.
The stock is up 11.3% since reporting and currently trades at $71.51.
Read our full, actionable report on Haemonetics here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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