The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how surgical equipment & consumables - diversified stocks fared in Q4, starting with Solventum (NYSE:SOLV).
The surgical equipment and consumables industry provides tools, devices, and disposable products essential for surgeries and medical procedures. These companies therefore benefit from relatively consistent demand, driven by the ongoing need for medical interventions, recurring revenue from consumables, and long-term contracts with hospitals and healthcare providers. However, the high costs of R&D and regulatory compliance, coupled with intense competition and pricing pressures from cost-conscious customers, can constrain profitability. Over the next few years, tailwinds include aging populations, which tend to need surgical interventions at higher rates. The increasing integration of AI and robotics into surgical procedures could also create opportunities for differentiation and innovation. However, the industry faces headwinds including potential supply chain vulnerabilities, evolving regulatory requirements, and more widespread efforts to make healthcare less costly.
The 5 surgical equipment & consumables - diversified stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.3% since the latest earnings results.
Solventum (NYSE:SOLV)
Founded in 1985, Solventum (NYSE:SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.
Solventum reported revenues of $2.07 billion, up 1.9% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
Solventum Total Revenue
Solventum delivered the slowest revenue growth of the whole group. The stock is down 11.2% since reporting and currently trades at $74.01.
With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE:BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.
BD reported revenues of $5.17 billion, up 9.8% year on year, outperforming analysts’ expectations by 1.2%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ constant currency revenue estimates.
BD Total Revenue
BD delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 4.6% since reporting. It currently trades at $233.69.
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE:CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
CONMED reported revenues of $345.9 million, up 5.8% year on year, exceeding analysts’ expectations by 1%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 21.3% since the results and currently trades at $58.51.
With a mission critical role in preventing healthcare-associated infections, STERIS (NYSE:STE) provides infection prevention products, sterilization services, and medical equipment that help healthcare facilities and life science companies maintain sterile environments.
STERIS reported revenues of $1.37 billion, up 5.6% year on year. This print lagged analysts' expectations by 0.6%. Aside from that, it was a mixed quarter as it also produced full-year EPS guidance in line with analysts’ estimates.
STERIS had the weakest performance against analyst estimates among its peers. The stock is up 2.4% since reporting and currently trades at $225.98.
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE:ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Zimmer Biomet reported revenues of $2.02 billion, up 4.3% year on year. This result was in line with analysts’ expectations. However, it was a slower quarter as it logged a significant miss of analysts’ full-year EPS guidance estimates.
The stock is up 3.4% since reporting and currently trades at $111.92.
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