Can These 5 MedTech Stocks Hit Earnings Targets This Season?

The fourth-quarter 2024 earnings season has just kicked off for the MedTech space, with a number of bigwigs scheduled to release their results this week.See the Zacks Earnings Calendar to stay ahead of market-making news.Per the latest Earnings Preview, quarterly results of the broader Medical sector are projected to improve year over year, buoyed by increased demand across multiple industries and a rise in hospital visits. AI-powered algorithms drove innovation in the fourth quarter in diagnostics, cardiovascularhealth, patient monitoring and personalized treatment. However, a deteriorating geopolitical situation, supply chain bottlenecks leading to a tough situation related to raw material and labor costs, freight charges, as well as healthcare staffing shortages are expected to have put the industry in a tight spot in the fourth quarter. Meanwhile, the FDA’s increased focus on cybersecurity for medical devices has led to costly fines and delays in regulatory approval processes. FX headwinds are expected to have aggravated during the fourth quarter.Going by the broader Medical sector’s scorecard, 12.3% of the companies in the sector, constituting 30.8% of its market capitalization, reported earnings till Jan. 29. Earnings improved 1.8% year over year on 6.6% higher revenues. Of the total index members, 85.7% beat on earnings and 57.1% reported a revenue beat.Overall, fourth-quarter 2024 earnings of the Medical sector are expected to improve 12.5% on 8.6% revenue growth. This compares with fourth-quarter 2023 earnings improvement of 11.3% and revenue growth of 11.6%.Major industry players like Boston Scientific BSX, Hologic HOLX, BioTechne TECH, STERIS STE and Align Technology ALGN are set to report results tomorrow.Factors Likely to Influence MedTech Stocks' Q4 ResultsReplicating the broader market trend, MedTech or the Zacks-defined Medical Products companies are expected to report collective sales growth for the fourth quarter. Through the months of 2024, the industry showed a gradual increase in the rate of patient visits in hospitals. This high rate of hospitalization led to growing demand for a broad array of medical devices. Further, the rapid adoption of generative Artificial Intelligence (genAI) and digital therapies is expected to have generated a significant revenue stream in the fourth quarter.Also, for several quarters, diagnostic testing companies have been witnessing a severe year-over-year decline in testing demand, compared to strong demand in the year-ago period for COVID-19 testing products. Although, this time, too, we expect to see another quarter of year-over-year decline in diagnostics revenues, the magnitude of this decline may have reduced because, during the fourth quarter of 2023, diagnostic revenues were already soft for the companies (in May 2023, WHO declared an end to COVID-19 as a public health emergency).An aging population, growing healthcare awareness and increasing access to better health options are macro trends that have been setting the stage for even more innovation and investment in this space. Favorable impacts from these are expected to be seen in the fourth-quarter results.Yet, the industry continues to be in a difficult position due to a tough geopolitical environment, supply chain bottlenecks that result in high costs for labor and raw materials, as well as a shortage of freight and healthcare workers. Further, fiscal hurdles in the form of high borrowing rates might have intensified bottom-line pressure for the MedTech stocks.MedTech Stocks to WatchBoston Scientific: The company’s Interventional Cardiology business is expected to have registered year-over-year growth in the fourth quarter, banking on the strong performance of the company’s global imaging franchise and calcium portfolio. The WATCHMAN subsegment within the Cardiovascular division has shown meaningful strength in recent times. It is once again expected to report strong growth this time around on sustained momentum from second-generation WATCHMAN FLX, ongoing clinical evidence, globalization and commercial execution.(Read more: BSX Pre-Q4 Earnings: To Buy or Not to Buy Boston Scientific Stock Now?)The Zacks Consensus Estimate for fourth-quarter total revenues is pegged at $4.40 billion, suggesting an improvement of 18.1% from the prior-year quarter’s reported number.The consensus mark for adjusted earnings stands at 65 cents per share, implying an 18.2% rise from the year-ago quarter’s reported figure.During the fourth quarter, the company’s shares rose 6.1% against the industry’s 4.1% decline.Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is not the case, as you can see below. You can see the complete list of today’s Zacks #1 Rank stocks here.BSX has an Earnings ESP of -0.60% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Boston Scientific Corporation Price and EPS Surprise Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation QuoteHologic: In the first quarter of fiscal 2025, Hologic is likely to have faced a few transitory challenges, including the pause of the Horizon DXA shipments in the Skeletal Health division. Although the company has been actively working with suppliers to resolve the issue, revenues are expected to have been affected in the first quarter. Meanwhile, its Breast Health segment is likely to have benefited from robust service contract revenues from an expanded installed base. Interventional products like the portfolio of disposable needles and markers may have boosted the performance.(Read more: Hologic's Q1 Earnings Coming Up: How to Play the Stock)The Zacks Consensus Estimate for first-quarter earnings suggests a 3.1% increase year over year to $1.01 per share. The Zacks Consensus Estimate for first-quarter revenues currently stands at $1.03 billion, indicating a 1.4% improvement compared to the year-ago period.During the fiscal first quarter, the stock declined 10.5% compared with the industry’s 5.2% drop.HOLX has an Earnings ESP of +1.48% and carries a Zacks Rank #3.Hologic, Inc. Price and EPS Surprise Hologic, Inc. price-eps-surprise | Hologic, Inc. QuoteBioTechne: Similar to the last reported quarter, Bio-Techne’s cell and gene therapy vertical within the Protein Sciences segment is expected to have delivered growth in the second quarter of fiscal 2025, banking on strong performances of proteomic reagent and scalable workflow solutions that enable customers to accelerate e-clinical, clinical and eventually aid in the commercialization of these next-generation therapeutics.(Read more: TECH Gears Up to Report Q2 Earnings: Here's What to Expect)For the fiscal second quarter, the Zacks Consensus Estimate for Bio-Techne’s revenues is pegged at $285.3 million, indicating an increase of 4.7% from the year-ago reported figure. The Zacks Consensus Estimate for the company’s second-quarter fiscal 2025 EPS suggests a 5% year-over-year decline to 38 cents.Meanwhile, during the fiscal second quarter, shares of the company declined 7.8% compared with the industry’s 11.5% decline.TECH has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell).Bio-Techne Corp Price and EPS Surprise Bio-Techne Corp price-eps-surprise | Bio-Techne Corp QuoteSTERIS: In the second quarter of fiscal 2025, growth across consumables and services was robust, favored by procedure volumes in the United States as well as price and market share gains. We expect this trend to have continued in the fiscal third quarter as well. Meanwhile, the Life Sciences segment experienced constant currency organic growth during the fiscal second quarter, driven by strong growth in consumables. We expect this trend to have continued in the fiscal third quarter.  (Read more: STE Gears Up for Q3 Earnings: Here's What You Need to Know)The Zacks Consensus Estimate for revenues is pegged at $1.38 billion, suggesting a decrease of 1.1% from the year-ago reported figure. The Zacks Consensus Estimate for EPS is pegged at $2.32, indicating a year-over-year increase of 4.5%.Meanwhile, during the fiscal third quarter, shares of the company decreased 12.6% compared with the industry’s 5.2% dip.STERIS has an Earnings ESP of -0.43% and carries a Zacks Rank #3.STERIS plc Price and EPS Surprise STERIS plc price-eps-surprise | STERIS plc QuoteAlign Technology: Similar to the last reported quarter, Align Technology is likely to have witnessed strength in Clear Aligner volumes for teens and growing kids, reflecting growth across regions, especially from Invisalign First in the APAC and EMEA regions. In the to-be-reported quarter, non-case revenues might have witnessed a year-over-year increase owing to the sustained growth of Vivera retainers and Doctor Subscription Program touch-up cases. However, pronounced seasonality and soft dental markets in the United States might have hurt the segment’s revenues in the fourth quarter.   (Read more: ALGN Gears Up for Q4 Earnings: What Lies Ahead for the Stock?)The Zacks Consensus Estimate for revenues is pegged at $997.0 million, suggesting growth of 4.2% from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pinned at $2.43 per share, indicating a 0.4% improvement from the year-ago recorded actuals.Meanwhile, during the fourth quarter, shares of the company declined 15% against the industry’s 1% growth.Align Technology has an Earnings ESP of +2.84% and carries a Zacks Rank #4.Align Technology, Inc. Price and EPS Surprise Align Technology, Inc. price-eps-surprise | Align Technology, Inc. QuoteResearch Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Align Technology, Inc. (ALGN): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis Report STERIS plc (STE): Free Stock Analysis Report Bio-Techne Corp (TECH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks