Personal health and wellness is one of the many secular tailwinds for healthcare companies. Despite the rosy long-term prospects, short-term headwinds such as COVID inventory destocking have harmed the industry’s returns - over the past six months, healthcare stocks have collectively shed 8.4%. This drop is a stark contrast from the S&P 500’s 5.4% gain.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Keeping that in mind, here is one healthcare stock boasting a durable advantage and two we’re passing on.

Two HealthcareStocks to Sell:

Regeneron (REGN)

Market Cap: $60.29 billion

Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ: REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.

Why Are We Hesitant About REGN?

1. Sizable revenue base leads to growth challenges as its 6.7% annual revenue increases over the last two years fell short of other healthcare companies
2. Efficiency has decreased over the last five years as its adjusted operating margin fell by 12.3 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Regeneron is trading at $578.48 per share, or 14.3x forward P/E. To fully understand why you should be careful with REGN, check out our full research report (it’s free).

iRhythm (IRTC)

Market Cap: $4.43 billion

Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ: IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders.

Why Are We Cautious About IRTC?

1. Issuance of new shares over the last five years caused its earnings per share to fall by 5.6% annually while its revenue grew
2. Negative free cash flow raises questions about the return timeline for its investments
3. 124× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $137.98 per share, iRhythm trades at 77.6x forward EV-to-EBITDA. If you’re considering IRTC for your portfolio, see our FREE research report to learn more.

One Healthcare Stock to Buy:

Insulet (PODD)

Market Cap: $20.55 billion

Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.

Why Should You Buy PODD?

1. Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 26.6% over the past two years
2. Additional sales over the last five years increased its profitability as the 113% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin jumped by 21.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Insulet’s stock price of $290 implies a valuation ratio of 66x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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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