From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. 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 13.8%. This drop is a stark contrast from the S&P 500’s 5.8% gain.

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

Two HealthcareStocks to Sell:

AMN Healthcare Services (AMN)

Market Cap: $750.4 million

With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE: AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.

Why Do We Think AMN Will Underperform?

1. Declining travelers on assignment over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Forecasted revenue decline of 8.1% for the upcoming 12 months implies demand will fall even further
3. Eroding returns on capital suggest its historical profit centers are aging

AMN Healthcare Services’s stock price of $19.63 implies a valuation ratio of 16.1x forward P/E. Dive into our free research report to see why there are better opportunities than AMN.

Guardant Health (GH)

Market Cap: $5.64 billion

Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ: GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.

Why Does GH Worry Us?

1. Earnings per share fell by 23.7% annually over the last five years while its revenue grew, partly because it diluted shareholders
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Guardant Health is trading at $45 per share, or 6.1x forward price-to-sales. Read our free research report to see why you should think twice about including GH in your portfolio.

One Healthcare Stock to Watch:

agilon health (AGL)

Market Cap: $856.9 million

Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.

Why Do We Like AGL?

1. Market share has increased this cycle as its 40.5% annual revenue growth over the last two years was exceptional
2. Customer trends over the past two years show it’s maintaining a steady flow of new contracts that can potentially increase in value over time
3. Earnings per share grew by 26% annually over the last three years, massively outpacing its peers

At $2.10 per share, agilon health trades at 0.1x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound 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-micro-cap company Tecnoglass (+1,754% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.