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5 Winning Medical Product Stocks That Still Have Room to Run
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The gradually-recovering global economy started to face new challenges as 2022 unfolded. Supply-chain headwinds and inflationary pressures hampered operations across industries, especially during the second half of 2022.
Market experts expect economies across the world to witness a slowdown in 2023 amid rising fears of an impending recession. They remain pessimistic about the stock market in the next year. The probable recession will be an effect of ongoing macro-challenges like rising interest rates, record inflation and geopolitical pressure, per JPMorgan Chase. The ongoing macro challenges are likely to wash away the benefits of savings and government aid received during the pandemic.
The Federal Reserve, by increasing its benchmark interest rate to counter inflationary woes, has raised the possibility of a downturn next year. Some experts believe that the Federal Reserve’s bid to contain inflation by increasing interest rates will likely achieve its target but put pressure on the consumers’ wallets and potentially trigger a recession in 2023. The continuing Russia-Ukraine might result in a further rise in commodity prices worldwide with an enduring impact. Market watchers are wary of these two factors as these may thwart equity market investment.
Amid the uncertain macroeconomic business environment, investors can turn their attention to a few medical products stocks that have been holding steady. Cardinal Health (CAH - Free Report) , TransMedics Group (TMDX - Free Report) , Olink Holding , Silk Road Medical and Neuronetics (STIM - Free Report) have created wealth for their investors in 2022 despite facing challenges. The rally in these stocks is likely to continue on the back of favorable fundamental factors. These stocks either have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have witnessed a rally of at least 20% so far in 2022. You can see the complete list of today’s Zacks Rank #1 stocks here.
Image Source: Zacks Investment Research
Cardinal Health
The company, carrying a Zacks Rank of 2, is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. It witnessed revenue growth in its major segment — Pharmaceutical — in the fourth quarter of fiscal 2022.
Cardinal Health’s diversified product portfolio and long-term supply agreements augur well. Meanwhile, its plans to build a new medical distribution center in the central Ohio area, its partnership with Innara Health and Kinaxis, and the introduction of the first surgical incise drape during the fourth quarter are likely to further boost revenues going forward. A solid solvency position is another plus.
The Zacks Consensus Estimate for its current fiscal year (FY23) earnings is pegged at $5.27, suggesting a year-over-year improvement of 4.2%. For FY24, estimates suggest a further 14% rise in the bottom line. Estimates for FY23 and FY24 have moved north by 1% each in the past 60 days.
The forecast for year-over-year revenue growth is 8.8% for FY23 and 7.3% for FY24. Shares of CAH have gained 55.5% so far this year.
This Zacks Rank #2 company has developed the Organ Care System to disrupt the decades-old standard of care for organ transplant therapy for end-stage organ failure patients across multiple disease states. TransMedics Group’s technology represents a paradigm shift that transforms organ preservation for transplantation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment.
TransMedics Group has demonstrated significant improvement in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 378% year over year, while loss narrowed 46.8%.
The Zacks Consensus Estimate for its current fiscal year (FY22) is pegged at a loss of $1.30, implying a year-over-year improvement of 18.8%. For FY23, estimates suggest a further improvement of 35.2% in the bottom line. Loss estimates for FY23 and FY24 have narrowed 17.7% and 16%, respectively, in the past 60 days.
The projected revenue growth is 185.7% for FY22 and 49.6% for FY23. Shares of TMDX have gained 210.5% so far this year.
This Zacks Rank #1 company provides a platform of products and services deployed across major biopharmaceutical companies and leading clinical and academic institutions. The platform helps to deepen the understanding of real-time human biology and drives 21st-century healthcare through actionable and impactful science.
Olink Holding has demonstrated significant improvement in both the top and the bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 60% year over year, while loss narrowed 80%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of 13 cents a share, implying a year-over-year improvement of almost 70%. For revenues, estimates suggest an improvement of 45.7% for 2022 and 47.8% in 2023. Loss estimates for FY23 and FY24 have narrowed 45.8% and 6.7%, respectively, in the past 60 days. Shares of OLK have gained 36% so far this year.
This Zacks Rank #2 company has developed a technologically advanced, minimally-invasive solution for patients with carotid artery disease who are at risk for stroke. The company's portfolio of products enables transcarotid artery revascularization (TCAR) that combines the benefits of endovascular techniques and surgical principles. It manufactures and sells its portfolio of TCAR products in the United States. The products are designed to provide direct access to the carotid artery, aid in effective reduction in stroke risk throughout the procedure, and enable long-term restraint of carotid plaque
Silk Road Medical has demonstrated significant improvements in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 48% year over year, while loss narrowed 27.5%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of $1.57, implying a year-over-year decline of 9%. For 2023, however, estimates suggest an improvement of 11.3% in the bottom line. Loss estimates for 2022 and 2023 have narrowed 13.3% and 9.4%, respectively, in the past 60 days.
The projected revenue growth is 33.9% for FY22 and 26.8% for 2023. Shares of SILK26.8 have gained 55.5% so far this year.
This Zacks Rank #2 company is focused on designing, developing and marketing products that improve the quality of life for patients who suffer from neurohealth disorders. The company’s first commercial product, the NeuroStar Advanced Therapy System, is a non-invasive and non-systemic office-based treatment that is approved for treating adult patients with major depressive disorder (MDD). The patient population of the system was expanded in 2022 to include people suffering from obsessive-compulsive disorder as well as for the treatment of comorbid anxiety symptoms for adults with MDD.
Neuronetics has demonstrated significant improvements in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 14% year over year, while loss narrowed 9.7%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of $1.51, implying a year-over-year decline of 23.8%. For 2023, however, estimates suggest an improvement of 11.3% in the bottom line. Loss estimates for 2022 and 2023 have narrowed 9% and 10.1%, respectively, in the past 60 days.
The projected revenue growth is 14.6% for 2022 and 14.8% for 2023. Shares of STIM have gained 33.9% so far this year.
Image: Bigstock
5 Winning Medical Product Stocks That Still Have Room to Run
The gradually-recovering global economy started to face new challenges as 2022 unfolded. Supply-chain headwinds and inflationary pressures hampered operations across industries, especially during the second half of 2022.
Market experts expect economies across the world to witness a slowdown in 2023 amid rising fears of an impending recession. They remain pessimistic about the stock market in the next year. The probable recession will be an effect of ongoing macro-challenges like rising interest rates, record inflation and geopolitical pressure, per JPMorgan Chase. The ongoing macro challenges are likely to wash away the benefits of savings and government aid received during the pandemic.
The Federal Reserve, by increasing its benchmark interest rate to counter inflationary woes, has raised the possibility of a downturn next year. Some experts believe that the Federal Reserve’s bid to contain inflation by increasing interest rates will likely achieve its target but put pressure on the consumers’ wallets and potentially trigger a recession in 2023. The continuing Russia-Ukraine might result in a further rise in commodity prices worldwide with an enduring impact. Market watchers are wary of these two factors as these may thwart equity market investment.
Amid the uncertain macroeconomic business environment, investors can turn their attention to a few medical products stocks that have been holding steady. Cardinal Health (CAH - Free Report) , TransMedics Group (TMDX - Free Report) , Olink Holding , Silk Road Medical and Neuronetics (STIM - Free Report) have created wealth for their investors in 2022 despite facing challenges. The rally in these stocks is likely to continue on the back of favorable fundamental factors. These stocks either have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have witnessed a rally of at least 20% so far in 2022. You can see the complete list of today’s Zacks Rank #1 stocks here.
Image Source: Zacks Investment Research
Cardinal Health
The company, carrying a Zacks Rank of 2, is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. It witnessed revenue growth in its major segment — Pharmaceutical — in the fourth quarter of fiscal 2022.
Cardinal Health’s diversified product portfolio and long-term supply agreements augur well. Meanwhile, its plans to build a new medical distribution center in the central Ohio area, its partnership with Innara Health and Kinaxis, and the introduction of the first surgical incise drape during the fourth quarter are likely to further boost revenues going forward. A solid solvency position is another plus.
The Zacks Consensus Estimate for its current fiscal year (FY23) earnings is pegged at $5.27, suggesting a year-over-year improvement of 4.2%. For FY24, estimates suggest a further 14% rise in the bottom line. Estimates for FY23 and FY24 have moved north by 1% each in the past 60 days.
The forecast for year-over-year revenue growth is 8.8% for FY23 and 7.3% for FY24. Shares of CAH have gained 55.5% so far this year.
Cardinal Health, Inc. Price
Cardinal Health, Inc. price | Cardinal Health, Inc. Quote
TransMedics Group
This Zacks Rank #2 company has developed the Organ Care System to disrupt the decades-old standard of care for organ transplant therapy for end-stage organ failure patients across multiple disease states. TransMedics Group’s technology represents a paradigm shift that transforms organ preservation for transplantation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment.
TransMedics Group has demonstrated significant improvement in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 378% year over year, while loss narrowed 46.8%.
The Zacks Consensus Estimate for its current fiscal year (FY22) is pegged at a loss of $1.30, implying a year-over-year improvement of 18.8%. For FY23, estimates suggest a further improvement of 35.2% in the bottom line. Loss estimates for FY23 and FY24 have narrowed 17.7% and 16%, respectively, in the past 60 days.
The projected revenue growth is 185.7% for FY22 and 49.6% for FY23. Shares of TMDX have gained 210.5% so far this year.
TransMedics Group, Inc. Price
TransMedics Group, Inc. price | TransMedics Group, Inc. Quote
Olink Holding
This Zacks Rank #1 company provides a platform of products and services deployed across major biopharmaceutical companies and leading clinical and academic institutions. The platform helps to deepen the understanding of real-time human biology and drives 21st-century healthcare through actionable and impactful science.
Olink Holding has demonstrated significant improvement in both the top and the bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 60% year over year, while loss narrowed 80%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of 13 cents a share, implying a year-over-year improvement of almost 70%. For revenues, estimates suggest an improvement of 45.7% for 2022 and 47.8% in 2023. Loss estimates for FY23 and FY24 have narrowed 45.8% and 6.7%, respectively, in the past 60 days. Shares of OLK have gained 36% so far this year.
Olink Holding AB publ Sponsored ADR Price
Olink Holding AB publ Sponsored ADR price | Olink Holding AB publ Sponsored ADR Quote
Silk Road Medical
This Zacks Rank #2 company has developed a technologically advanced, minimally-invasive solution for patients with carotid artery disease who are at risk for stroke. The company's portfolio of products enables transcarotid artery revascularization (TCAR) that combines the benefits of endovascular techniques and surgical principles. It manufactures and sells its portfolio of TCAR products in the United States. The products are designed to provide direct access to the carotid artery, aid in effective reduction in stroke risk throughout the procedure, and enable long-term restraint of carotid plaque
Silk Road Medical has demonstrated significant improvements in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 48% year over year, while loss narrowed 27.5%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of $1.57, implying a year-over-year decline of 9%. For 2023, however, estimates suggest an improvement of 11.3% in the bottom line. Loss estimates for 2022 and 2023 have narrowed 13.3% and 9.4%, respectively, in the past 60 days.
The projected revenue growth is 33.9% for FY22 and 26.8% for 2023. Shares of SILK26.8 have gained 55.5% so far this year.
Silk Road Medical, Inc. Price
Silk Road Medical, Inc. price | Silk Road Medical, Inc. Quote
Neuronetics
This Zacks Rank #2 company is focused on designing, developing and marketing products that improve the quality of life for patients who suffer from neurohealth disorders. The company’s first commercial product, the NeuroStar Advanced Therapy System, is a non-invasive and non-systemic office-based treatment that is approved for treating adult patients with major depressive disorder (MDD). The patient population of the system was expanded in 2022 to include people suffering from obsessive-compulsive disorder as well as for the treatment of comorbid anxiety symptoms for adults with MDD.
Neuronetics has demonstrated significant improvements in both the top and bottom lines so far in 2022. During the third quarter of FY22, revenues grew more than 14% year over year, while loss narrowed 9.7%.
The Zacks Consensus Estimate for 2022 is pegged at a loss of $1.51, implying a year-over-year decline of 23.8%. For 2023, however, estimates suggest an improvement of 11.3% in the bottom line. Loss estimates for 2022 and 2023 have narrowed 9% and 10.1%, respectively, in the past 60 days.
The projected revenue growth is 14.6% for 2022 and 14.8% for 2023. Shares of STIM have gained 33.9% so far this year.
Neuronetics, Inc. Price
Neuronetics, Inc. price | Neuronetics, Inc. Quote