From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. 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’s return was flat while the S&P 500 climbed by 9.7%.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here is one resilient healthcare stock at the top of our wish list and two we’re steering clear of.
Two Healthcare Stocks to Sell:
Gilead Sciences (GILD)
Market Cap: $139.9 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Cautious About GILD?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.7% for the last two years
- Projected sales growth of 2.3% for the next 12 months suggests sluggish demand
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Gilead Sciences’s stock price of $111.90 implies a valuation ratio of 13.6x forward P/E. To fully understand why you should be careful with GILD, check out our full research report (it’s free).
Bruker (BRKR)
Market Cap: $5.04 billion
With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ: BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.
Why Does BRKR Give Us Pause?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Free cash flow margin dropped by 12.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Bruker is trading at $29.99 per share, or 12.6x forward P/E. Check out our free in-depth research report to learn more about why BRKR doesn’t pass our bar.
One Healthcare Stock to Watch:
Zoetis (ZTS)
Market Cap: $67.75 billion
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Why Do We Like ZTS?
- Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
- ZTS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- ROIC punches in at 29.4%, illustrating management’s expertise in identifying profitable investments
At $152.50 per share, Zoetis trades at 23.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. 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 Comfort Systems (+782% 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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