Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. But financial performance has lagged recently as players offloaded surplus COVID inventories in 2023 and 2024, a headwind for overall demand. The result? Over the past six months, the industry has tumbled by 6%. This performance is a far cry from the S&P 500’s 7.5% ascent.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one healthcare stock boasting a durable advantage and two best left ignored.
Two HealthcareStocks to Sell:
CONMED (CNMD)
Market Cap: $1.64 billion
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
Why Is CNMD Not Exciting?
- Sales trends were unexciting over the last five years as its 6.7% annual growth was below the typical healthcare company
- Modest revenue base of $1.32 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Underwhelming 5% return on capital reflects management’s difficulties in finding profitable growth opportunities
CONMED is trading at $52.91 per share, or 11.8x forward P/E. Check out our free in-depth research report to learn more about why CNMD doesn’t pass our bar.
LifeStance Health Group (LFST)
Market Cap: $1.85 billion
With over 6,600 licensed mental health professionals treating more than 880,000 patients annually, LifeStance Health (NASDAQ: LFST) provides outpatient mental health services through a network of clinicians offering psychiatric evaluations, psychological testing, and therapy across 33 states.
Why Does LFST Give Us Pause?
- Smaller revenue base of $1.28 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Negative free cash flow raises questions about the return timeline for its investments
- Negative returns on capital show that some of its growth strategies have backfired
LifeStance Health Group’s stock price of $4.76 implies a valuation ratio of 62.6x forward P/E. Dive into our free research report to see why there are better opportunities than LFST.
One Healthcare Stock to Watch:
Boston Scientific (BSX)
Market Cap: $152.3 billion
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Should BSX Be on Your Watchlist?
- Average organic revenue growth of 14.9% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Projected revenue growth of 14.3% for the next 12 months suggests its momentum from the last two years will persist
- Additional sales over the last five years increased its profitability as the 12.2% annual growth in its earnings per share outpaced its revenue
At $103 per share, Boston Scientific trades at 34.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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