The 3 Best Medical Device Stocks to Buy in June 2024
Medical devices are spearheading the digitalization of healthcare, reports analytics and software development company Luxoft. Specifically, medical devices are “providing accurate diagnoses, effective treatments and personalized care through advanced algorithms and patient data analysis.”
Moreover, artificial intelligence (AI) is altering and improving the means by which many medical devices are created and work. Indeed, by quickly creating many prototypes based on design parameters and patient data, AI is allowing devices to be launched significantly faster and making them more effective. The latter development is likely lowering companies’ costs, while the former quality will probably enable them to charge more for their devices, raising revenue.
AI can also allow each device to be tailored to individual patients’ needs. It is another development that will probably allow medical device makers to charge more for their offerings. For investors wanting to exploit these trends, here are the three best medical device stocks to buy.
Intuitive Surgical (ISRG)
Intuitive Surgical’s (NASDAQ:ISRG) robots assist doctors with surgeries. At the end of last year, over 8,600 of the company’s da Vinci surgery-assistance robots were being utilized. That is a robust 14% increase versus the end of 2022.
The company’s newest product, da Vinci 5, was recently approved by the Food and Drug Administration. It features many improvements over the previous iteration, according to Intuitive Surgical. For example, surgeons can use up to 43% more force with the new device because of its increased sensitivity. The system also provides clearer, more realistic images. Additionally, AI-powered software enhancements can improved it.
Multiple major Wall Street banks are upbeat on ISRG stock. For example, Bank of America included the name on its list of best investment ideas in April while Citi incorporated ISRG stock into its list of top large-cap stocks in April.
Analysts expect the company’s earnings per share to climb to $7.37 next year, up from $6.29 in 2024.
TransMedics (TMDX)
TransMedics’ (NASDAQ:TMDX) organ care system (OCS) technology provides “perfusion, optimization, and monitoring” for organs for transplanting into human patients. According to the firm, its OCS also offers “near-physiologic conditions for donor organs outside of the human body”
On June 4, investment bank Stephens started coverage of TMDX stock with an “overweight” rating. The investment bank said the company’s OCS is improving the results of transplants while increasing the percentage of donated organs that can be successfully utilized. Finally, Stephens added that TransMedic’s products reduce hospital costs.
Last quarter, the company’s top line soared by a very impressive 133% versus the same period a year earlier to $96.85 million. And its net income came in at $12.2 million versus a net loss of $2.6 million in Q1 of 2023. Finally, TransMedics increased its full-year sales guidance to $390 million to $400 million from its previous outlook of $360 million to $370 million.
United Therapeutics (UTHR)
United Therapeutics (NASDAQ:UTHR) is unique because it has developed both medical devices and drugs with multiple treatments and devices for patients with pulmonary arterial hypertension.
In December, Morgan Stanley named UTHR stock as one of 32 names “with high free cash flow, high earnings per share growth, and an overweight rating,” according to Seeking Alpha.
In Q1, the company’s revenue jumped 34% versus the same period a year earlier to $677.7 million. Net income advanced 27.7% YOY to $306.6 million.
UTHR stock has a very low forward price-earnings ratio of 13 times, while it receives the highest possible Composite Rating of 99 from Investor’s Business Daily. Moreover, the publication gives the stock an Accumulation/Distribution grade of A. That indicates many large institutions have been buying the shares in the last 13 weeks.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
