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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

1 Healthcare Stock with Solid Fundamentals and 2 We Question

NVST Cover Image

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’s return was flat while the S&P 500 climbed by 10.5%.

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. On that note, here is one healthcare stock boasting a durable advantage and two we’re passing on.

Two Healthcare Stocks to Sell:

Envista (NVST)

Market Cap: $3.52 billion

Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE: NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals.

Why Do We Avoid NVST?

  1. Weak constant currency growth over the past two years indicates challenges in maintaining its market share
  2. Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam
  3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Envista is trading at $21.18 per share, or 18.9x forward P/E. Check out our free in-depth research report to learn more about why NVST doesn’t pass our bar.

Surgery Partners (SGRY)

Market Cap: $2.89 billion

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ: SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Why Does SGRY Give Us Pause?

  1. Underwhelming unit sales over the past two years suggest it might have to lower prices to accelerate growth
  2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.3% for the last five years
  3. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Surgery Partners’s stock price of $22.69 implies a valuation ratio of 23.8x forward P/E. Dive into our free research report to see why there are better opportunities than SGRY.

One Healthcare Stock to Watch:

Cardinal Health (CAH)

Market Cap: $35.53 billion

Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.

Why Could CAH Be a Winner?

  1. Enormous revenue base of $222.6 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
  2. Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 11.9% is above its two-year trend
  3. Earnings per share have outperformed the peer group average over the last five years, increasing by 8.6% annually

At $147.39 per share, Cardinal Health trades at 16.1x 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

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 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-micro-cap company Kadant (+351% 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.

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