RadNet, Inc. RDNT, on Sunday, announced that its wholly-owned subsidiary, DeepHealth, Inc., has partnered with Siemens Healthineers. The collaboration aims to transform ultrasound operations through the implementation of SmartTechnology by embedding artificial intelligence (AI)-powered health informatics within workflows and imaging hardware.
The collaboration will combine Siemens Healthineers’ Acuson Sequoia ultrasound system and DeepHealth’s SmartSonography solution powered by the cloud-native DeepHealth OS to tackle workflow and workforce challenges for enhanced operational efficiency and better patient experience. The companies will also likely benefit from RadNet’s expertise in high-volume outpatient care.
It should be noted that Siemens Healthineers, which harnesses AI to make ultrasound exams faster, smarter and more accessible to healthcare settings worldwide, has recently enhanced its Ultrasound portfolio.
The announcement of the latest collaboration is a significant stepping stone for RadNet to strengthen its foothold in the global ultrasound AI space.
Likely Trend of RDNT Stock Following the News
Following the announcement on Dec. 1, shares of the company gained nearly 1.3% till yesterday’s 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 $6.13 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, high-volume ultrasound care settings face significant challenges, including workforce shortages, operator limitations and fatigue, and variability in image acquisition quality. These factors can hamper timely and accurate diagnoses while contributing to unnecessary examinations. To mitigate these challenges, a remote collaboration and image acquisition command center will likely enable experienced technologists to oversee image acquisition across multiple locations.
Per RadNet’s management, the company aims to enhance operational efficiency and empower healthcare professionals to deliver accurate and timely patient care by integrating DeepHealth’s AI-powered SmartSonography solution with Siemens Healthineers’ ultrasound systems.
Siemens Healthineers’ management believes that the partnership with DeepHealth will likely aid in developing smarter ultrasound solutions that help improve productivity and access to high-quality imaging for more people.
Industry Prospects in Favor of RDNT
Per a report by Data Bridge Market Research, the global AI in ultrasound imaging market was estimated to be $818.20 million in 2022 and is anticipated to reach $1,686.18 million by 2030 at a CAGR of 8.6%. Factors like advancements in AI technology and growing medical imaging needs are likely to drive the market.
Given the market potential, the latest agreement is expected to provide a significant boost to RadNet’s Digital Health segment.
RadNet’s DeepHealth’s Recent Developments
This month, RadNet’s DeepHealth announced a partnership with 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.
The same month, RadNet’s DeepHealth launched new AI-powered solutions at RSNA 2024. DeepHealth also launched SmartTechnology solutions that integrate advanced AI and informatics with imaging systems for more efficient, patient-centric workflows.
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’s Senographe Pristina mammography systems.
RDNT’s Share Price Performance
Shares of the company have gained 134.5% in the past year compared with the industry’s 23.1% rise and the S&P 500's 32.8% growth.
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RadNet’s Zacks Rank & Key Picks
Currently, RDNT carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, Merit Medical Systems, Inc. MMSI 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 13.9% compared with the industry’s 8.8% rise in the past year.
Merit Medical, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 6.4%.
Merit Medical has gained 41.8% compared with the industry’s 8.8% 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 81.2% compared with the industry’s 14.7% rise in the past year.
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