RadNet, Inc. RDNT yesterday announced that its wholly-owned subsidiary, DeepHealth, Inc., has partnered with artificial intelligence (AI) orchestration company, CARPL.ai. The collaboration aims to create a unique AI control system for image interpretation to ensure AI scalability, performance monitoring and safety to accelerate the adoption of AI.
It should be noted that DeepHealth currently monitors the performance of its SmartMammo AI-powered solution for breast cancer detection at RDNT. Through the collaboration, the two companies aim to expand, productize and scale this control system across more applications to other customers.
The announcement of the latest collaboration is a significant stepping stone for RadNet to strengthen its foothold in the global radiology AI space.
Likely Trend of RDNT Stock Following the News
Following the announcement on Dec. 1, shares of the company gained nearly 0.1% in today’s pre-market trading.
Historically, the company has gained a high level of synergies from its various collaborations. We expect market sentiment on the stock to continue to remain positive around this announcement, too.
RadNet currently has a market capitalization of $6.11 billion. Its projected earnings per share growth of 19.3% is higher than the industry’s 14.2%. In the last reported quarter, RDNT delivered an earnings surprise of 20%.
Rationale Behind RadNet’s Tie Up
Per RDNT, DeepHealth is expected to use CARPL.ai’s technology to develop an AI control system that can be commercialized and will be designed to monitor and optimize imaging AI performance for improved clinical outcomes, operational efficiency and accelerated adoption of AI in radiology. AI monitoring is crucial to ensure reliable, accurate and unbiased performance.
The two companies will likely collaborate on a new closed-loop AI feedback system that will continually monitor AI model accuracy and relevance in clinical settings. The system will automate the measurement and monitoring of performance and safety metrics such as specificity, sensitivity, data- and model drift.
Per RadNet’s management, DeepHealth’s partnership with CARPL.ai is expected to address the need of running multiple AI models (even for a single use case) by creating a unique environment to dynamically run a combination of models and monitor performance and then continuously optimize the best models for specific tasks.
CARPL.ai’s management believes that the partnership with DeepHealth will likely aid in harnessing the transformative potential of AI within the radiology care continuum, particularly through workflow automation and clinical assistance.
Industry Prospects in Favor of RDNT
Per a report by Data Bridge Market Research, the global radiology market was valued at $30 billion in 2023 and is anticipated to reach $48.54 billion by 2031 at a CAGR of 6.2%. Factors like rising technological advancements and changing healthcare needs are likely to drive the market.
Given the market potential, the latest agreement is expected to provide a significant boost to RadNet’s business.
RadNet’s DeepHealth’s Recent Developments
This month, RadNet’s DeepHealth announced a strategic collaboration with Siemens Healthineers. The deal aims to transform ultrasound operations through the implementation of SmartTechnology by embedding AI-powered health informatics within workflows and imaging hardware.
Last month, RadNet’s DeepHealth received expanded FDA 510(k) clearance for its mammography software. SmartMammo Dx, the AI algorithm within SmartMammo, is now FDA-cleared to be compatible with GE HealthCare Technologies Inc.’s GEHC Senographe Pristina mammography systems.
The same month, DeepHealth announced a strategic collaboration with GEHC to further the innovation, commercialization and adoption of AI in imaging. RadNet and GE HealthCare aim to develop SmartTechnology solutions that harness the transformative power of AI to address key challenges across the imaging value chain.
RDNT’s Share Price Performance
Shares of the company have gained 132.1% in the past year compared with the industry’s 23.3% rise and the S&P 500's 32.4% growth.
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RadNet’s Zacks Rank & Key Picks
Currently, RDNT carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH and Globus Medical, Inc. GMED.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 10.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health’s shares have gained 13.3% compared with the industry’s 9.2% rise in the past year.
Globus Medical, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.1%. GMED’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.7%.
Globus Medical’s shares have rallied 85% compared with the industry’s 14.5% rise in the past year.
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