As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at medical devices & supplies - specialty stocks, starting with Haemonetics (NYSE:HAE).
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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.3% since the latest earnings results.
Haemonetics (NYSE:HAE)
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 $321.4 million, down 4.4% year on year. This print exceeded analysts’ expectations by 6.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.
Unsurprisingly, the stock is down 33.6% since reporting and currently trades at $50.26.
Is now the time to buy Haemonetics? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: STAAR Surgical (NASDAQ:STAA)
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ:STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
STAAR Surgical reported revenues of $44.32 million, down 55.2% year on year, outperforming analysts’ expectations by 9.6%. The business had an incredible quarter with an impressive beat of analysts’ constant currency revenue and EPS estimates.
STAAR Surgical delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.6% since reporting. It currently trades at $25.91.
Is now the time to buy STAAR Surgical? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Inspire Medical Systems (NYSE:INSP)
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 $217.1 million, up 10.8% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 40.2% since the results and currently trades at $78.01.
Read our full analysis of Inspire Medical Systems’s results here.
Integer Holdings (NYSE:ITGR)
With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE:ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.
Integer Holdings reported revenues of $476.5 million, up 11.4% year on year. This number beat analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.
The stock is down 9.4% since reporting and currently trades at $104.83.
Read our full, actionable report on Integer Holdings here, it’s free for active Edge members.
Globus Medical (NYSE:GMED)
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 $745.3 million, up 18.4% year on year. This print topped analysts’ expectations by 0.7%. Taking a step back, it was a satisfactory quarter as it also produced a solid beat of analysts’ constant currency revenue estimates but full-year EPS guidance in line with analysts’ estimates.
Globus Medical achieved the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is up 11.7% since reporting and currently trades at $60.46.
Read our full, actionable report on Globus Medical here, it’s free for active Edge members.
Market Update
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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