As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the medical devices & supplies - imaging, diagnostics industry, including Lantheus (NASDAQ:LNTH) and its peers.
The medical devices and supplies industry, particularly those specializing in imaging and diagnostics, operates with a comparatively stable yet capital-intensive business model. Companies in this space benefit from consistent demand driven by the essential nature of diagnostic tools in patient care, as well as recurring revenue streams from consumables, service contracts, and equipment maintenance. However, the industry faces challenges such as significant upfront development costs, stringent regulatory requirements, and pricing pressures from hospitals and healthcare systems, which are increasingly focused on cost containment. Looking ahead, the industry should enjoy tailwinds from advancements in technology, including the integration of artificial intelligence to enhance diagnostic accuracy and workflow efficiency, as well as rising demand for imaging solutions driven by aging populations. On the other hand, headwinds could arise from a rethinking of healthcare costs potentially resulting in reimbursement cuts and slower capital equipment purchasing. Additionally, cybersecurity concerns surrounding connected medical devices could introduce new risks and complexities for manufacturers.
The 4 medical devices & supplies - imaging, diagnostics stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.3%.
Thankfully, share prices of the companies have been resilient as they are up 6.7% on average since the latest earnings results.
Lantheus (NASDAQ:LNTH)
Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.
Lantheus reported revenues of $384 million, up 1.4% year on year. This print exceeded analysts’ expectations by 5.2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.
“Lantheus’ third quarter results underscore the strength of our strategy and the dedication of our team as we continue to advance our leadership in radiopharmaceuticals,” said Brian Markison, CEO.
Lantheus achieved the biggest analyst estimates beat but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 15.2% since reporting and currently trades at $65.94.
Is now the time to buy Lantheus? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: QuidelOrtho (NASDAQ:QDEL)
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
QuidelOrtho reported revenues of $699.9 million, down 3.7% year on year, outperforming analysts’ expectations by 5.2%. The business had a strong quarter with an impressive beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.
QuidelOrtho pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 6.2% since reporting. It currently trades at $29.06.
Is now the time to buy QuidelOrtho? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: GE HealthCare (NASDAQ:GEHC)
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ:GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
GE HealthCare reported revenues of $5.14 billion, up 5.8% year on year, exceeding analysts’ expectations by 1.5%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a narrow beat of analysts’ organic revenue estimates and a narrow beat of analysts’ revenue estimates.
GE HealthCare delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 4.4% since the results and currently trades at $82.90.
Read our full analysis of GE HealthCare’s results here.
Hologic (NASDAQ:HOLX)
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ:HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Hologic reported revenues of $1.05 billion, up 6.2% year on year. This number beat analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ revenue estimates.
Hologic pulled off the fastest revenue growth among its peers. The stock is up 1.2% since reporting and currently trades at $74.96.
Read our full, actionable report on Hologic here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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