5 Medical Device Stocks That Survived the 2024 Market Volatility

Industry Overview - The medical device industry faced significant challenges in 2024, including regulatory bottlenecks, supply-chain disruptions, and geopolitical tensions, particularly in the U.S., Europe, and China [1] - Supply-chain disruptions, initially triggered by the COVID-19 pandemic, persisted in 2024, with rising raw material costs and semiconductor shortages heavily affecting device manufacturing [2] - Inflation in the U.S. and Europe increased operational expenses and reduced profit margins, making it difficult for companies to balance price increases with affordability for healthcare providers [2] - China's medical device market encountered unique challenges, including trade restrictions, domestic competition, and regulatory shifts emphasizing "localization," which compelled international companies to form joint ventures [3] Outlook for 2025 - Challenges in the medical device industry are unlikely to dissipate entirely in 2025, with companies seeking streamlined regulatory processes in the U.S. and Europe, though real change will take years [4] - Supply-chain resilience will require substantial investments in localized manufacturing, while navigating regulatory and market complexities in China will demand strategic partnerships and localization strategies [4] - The possibility of a tariff war between the U.S. and China, especially with Trump's potential return to the White House, could disrupt supply chains and increase material costs [4] Company Performance and Prospects Intuitive Surgical (ISRG) - Intuitive Surgical ended Q3 2024 on a positive note, beating estimates, with revenue growth driven by increased da Vinci procedure volume and strong Ion procedure growth [7][8] - The company expects a nearly three percentage point headwind for revenues in 2024 due to weakness in bariatric procedures and challenges in China from increasing provincial robotic competition and delayed tenders [9] - ISRG's earnings growth rate for 2025 is pegged at 14.1%, with a Zacks Consensus Estimate indicating a 17% year-over-year rise in revenues [10] Globus Medical (GMED) - Globus Medical is expanding its global presence, driven by market growth in the U.S. spine and increasing international momentum, with significant synergy from the NuVasive merger [11] - The company launched four new products in Q3 2024, which are likely to generate additional revenues in 2025 [11] - GMED's earnings growth rate for 2025 is pegged at 16.1%, with a Zacks Consensus Estimate indicating a 6.7% year-over-year rise in revenues [13] Glaukos (GKOS) - Glaukos is focused on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies, with strength in the iStent product line and the launch of iDose TR in Q3 2024 [14] - The company is targeting NDA submission for its corneal cross-linking therapy, Epioxa, by the end of 2024 [14] - GKOS' earnings growth rate for 2025 is pegged at 44.4%, with a Zacks Consensus Estimate indicating a 26.3% year-over-year rise in revenues [17] Veracyte (VCYT) - Veracyte continues to display robust strength in the testing business, with market share gains driven by Affirma's differentiation and strong interest in the new GRID ROU tool [18] - The company is experiencing significant declines in biopharma and other services revenues due to reductions in customer projects, extended sales cycles, and spending constraints [19] - VCYT's earnings growth rate for 2025 is pegged at 65.8%, with a Zacks Consensus Estimate indicating a 9.8% year-over-year rise in revenues [20] Inogen (INGN) - Inogen's direct-to-customer business model and solid product suite, fueled by continued innovations, are expected to strengthen its foothold in the global long-term oxygen therapy market [21] - The company faces macroeconomic concerns, including the possibility of another public health crisis, Medicare headwinds, forex volatility, and stiff competition [22] - INGN's earnings growth rate for 2025 is pegged at 11.9%, with a Zacks Consensus Estimate indicating a 3.9% year-over-year improvement in revenues [22]