Industry Overview - The Medical Services sector is undergoing significant transformation driven by technological advancements, value-based care adoption, and a focus on patient-centric solutions and precision medicine [1] - The industry includes various service providers such as pharmacy benefit managers, contract research organizations, and healthcare workforce solution providers, moving from volume- to value-based care [4] Market Trends - The global healthcare analytics market was valued at 78 billion in 2024 to $540 billion by 2035, representing a CAGR of 19.20% [5] - The demand for skilled nursing professionals is rising, with a projected deficit of over 100,000 healthcare workers in the U.S. by 2028 [3][6] Staffing Challenges - The healthcare staffing shortage is exacerbated by the aging population and the impact of COVID-19, with WHO projecting a shortfall of 9.9 million healthcare workers globally by 2030 [6] - Labor costs have increased significantly, with hospitals experiencing a 15.6% rise in labor expenses per adjusted discharge compared to pre-pandemic levels [6] Employment Projections - Employment for nurse anesthetists, nurse midwives, and nurse practitioners is projected to grow 40% from 2023 to 2033, with about 31,900 openings expected each year [8] Industry Performance - The Zacks Medical Services industry ranks 71, placing it in the top 29% of 246 Zacks industries, indicating positive near-term prospects [9] - The industry has underperformed compared to its sector and the S&P 500, with a collective loss of 17.1% over the past year [11] Valuation Metrics - The industry is currently trading at a forward P/E of 15.5X, compared to the S&P 500's 21.18X and the sector's 23.07X [14] Stock Recommendations - Doximity (DOCS) is a digital platform for U.S. medical professionals, with an expected earnings growth rate of 7.7% for fiscal 2026 [19][20] - Pediatrix Medical (MD) provides specialized pediatric services, with projected earnings growth rates of 2.7% and 4.1% for 2025 and 2026, respectively [23][24] - Cencora (COR) focuses on drug distribution and related services, with an expected earnings growth rate of 11.6% for fiscal 2025 [27][28]
3 Medical Services Industry Stocks to Buy as AI Fuels Growth