Glaukos(GKOS) ZACKS·2024-12-12 08:16Industry 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 [2] - Global 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 [3] - Inflation in the United States and Europe increased operational expenses and reduced profit margins, making it difficult for companies to balance price increases with affordability for healthcare providers [3] - China's medical device market, the second largest globally, encountered trade restrictions, domestic competition, and regulatory shifts emphasizing "localization," creating a tougher operating environment for foreign firms [4] - Looking ahead to 2025, challenges are unlikely to dissipate entirely, with companies needing to invest in localized manufacturing and navigate regulatory complexities in China [5] Company Highlights Intuitive Surgical (ISRG) - The company designs, manufactures, and markets the da Vinci surgical system, Ion endoluminal system, and related instruments and accessories [7] - Intuitive Surgical ended the third quarter of 2024 on a positive note, beating estimates on both revenue and earnings, driven by growth in da Vinci and Ion procedure volumes [7] - The company expects a nearly three percentage point headwind for revenues in 2024 due to weakness in bariatric procedures and challenges in China [9] - 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) - The company develops and commercializes healthcare solutions for patients with musculoskeletal disorders, with sales operations in 51 countries [11] - Globus Medical is expanding its global presence and integrating the NuVasive merger, which is expected to generate additional revenues in 2025 [12] - The company faces intensifying competitive pricing pressure, which remains a major headwind [13] - 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 [14] Glaukos (GKOS) - The company focuses on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies for glaucoma [15] - Glaukos has shown strength in its iStent product line and launched iDose TR during the third quarter of 2024, with plans to submit an NDA for its corneal cross-linking therapy, Epioxa, by the end of 2024 [15] - The company has experienced higher costs for certain components and raw materials due to supply-chain challenges and inflationary pressures [17] - 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 [18] Veracyte (VCYT) - The company commercializes advanced genomic tests and has shown robust strength in its testing business [19] - Veracyte's Affirma and Decipher Prostrate tests are gaining market share and advancing on the reimbursement front [20] - The company is experiencing declines in biopharma and other services revenues due to reduced customer projects and extended sales cycles [21] - 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 [21] Inogen (INGN) - The company develops, manufactures, and markets portable oxygen concentrators, with a unique direct-to-customer business model [22] - Inogen's buyout of Physio-Assist and focus on advancing its innovation pipeline are expected to drive growth [22] - The company faces macroeconomic concerns, Medicare headwinds, forex volatility, and stiff competition [23] - 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 [23] Innovation and Growth Prospects - Despite persistent challenges, innovation remains a bright spot for the medical device industry, with companies like Intuitive Surgical, Globus Medical, Glaukos, Veracyte, and Inogen showing significant gains in 2024 [6] - These companies have favorable fundamentals and are expected to continue reaping benefits for their investors in 2025 [6]