Looking back on medical devices & supplies - specialty stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Enovis (NYSE:ENOV) 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%.
While some medical devices & supplies - specialty stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.5% since the latest earnings results.
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, but overall, it was a slower quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates.
“We delivered a strong start to 2025, with first-quarter revenues and margins exceeding expectations,” said Matt Trerotola, Chief Executive Officer of Enovis.
Enovis Total Revenue
Interestingly, the stock is up 4.7% since reporting and currently trades at $35.73.
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 Total Revenue
Inspire Medical Systems pulled off 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 5.9% since reporting. It currently trades at $149.69.
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, falling short of analysts’ expectations by 4.7%. It was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Globus Medical delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. As expected, the stock is down 18.5% since the results and currently trades at $59.
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. This number lagged analysts' expectations by 0.7%. Overall, it was a slower quarter as it also logged a significant miss of analysts’ EPS estimates and full-year EBITDA guidance missing analysts’ expectations.
The stock is down 14% since reporting and currently trades at $11.80.
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 print beat analysts’ expectations by 1%. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ organic revenue estimates.
The stock is up 8% since reporting and currently trades at $69.38.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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