As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the medical devices & supplies - diversified industry, including Neogen (NASDAQ:NEOG) 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. However, 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 5 medical devices & supplies - diversified stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q4: Neogen (NASDAQ:NEOG)
Founded in 1982, Neogen (NASDAQ:NEOG) provides a broad range of products and services to ensure food safety and animal health, including diagnostic tests, food safety equipment, and veterinary pharmaceuticals.Neogen reported revenues of $231.3 million, flat year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a strong quarter for the company with a decent beat of analysts’ EPS estimates.
"The second quarter reflected steady progress, as we saw improvement across the business compared to the first quarter, with core revenue growth accelerating in both of our segments, sequential margin expansion and significantly better free cash flow," said John Adent, Neogen’s President and Chief Executive Officer.
Neogen delivered the slowest revenue growth of the whole group. The stock is down 22.8% since reporting and currently trades at $10.10.
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Best Q4: Boston Scientific (NYSE:BSX)
Founded in 1979, Boston Scientific (NYSE:BSX) is a medical device company that designs, manufactures, and sells a wide range of technologies used in minimally-invasive medical procedures.Boston Scientific reported revenues of $4.56 billion, up 22.4% year on year, outperforming analysts’ expectations by 3.3%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue estimates.
Boston Scientific pulled off the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $104.26.
Baxter (NYSE:BAX)
Founded in 1931, Baxter International (NYSE:BAX) develops, manufactures, and sells a range of medical products and therapies, focusing on critical care, renal care, hospital products, and advanced surgical solutions.Baxter reported revenues of $2.75 billion, flat year on year, exceeding analysts’ expectations by 3.4%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ constant currency revenue estimates.
Interestingly, the stock is up 10.3% since the results and currently trades at $34.
Stryker (NYSE:SYK)
Founded in 1941 as a specialty medical products business, Stryker Corporation today designs and sells a wide range of medical devices, equipment, and technology across areas like orthopedics (bones, joints, ligaments, etc.), surgical equipment, and spine.Stryker reported revenues of $6.44 billion, up 10.7% year on year. This number surpassed analysts’ expectations by 1.4%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
The stock is down 3.7% since reporting and currently trades at $380.22.
Abbott Laboratories (NYSE:ABT)
Founded in 1888 as a small pharmaceutical company, Abbott Laboratories (NYSE:ABT) develops and sells a wide range of nutrition products, medical devices, and branded pharmaceuticals.Abbott Laboratories reported revenues of $10.97 billion, up 7.2% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also recorded organic revenue in line with analysts’ estimates.Abbott Laboratories had the weakest performance against analyst estimates among its peers. The stock is up 15.7% since reporting and currently trades at $135.06.
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This content was originally published on Stock Story
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