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2 Reasons CNMD is Risky and 1 Stock to Buy Instead

By: StockStory

September 11, 2025 at 00:03 AM EDT

CNMD Cover Image

Over the past six months, CONMED’s stock price fell to $52.81. Shareholders have lost 14.7% of their capital, which is disappointing considering the S&P 500 has climbed by 17.4%. This may have investors wondering how to approach the situation.

Is now the time to buy CONMED, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is CONMED Not Exciting?

Even with the cheaper entry price, we're swiping left on CONMED for now. Here are two reasons you should be careful with CNMD and a stock we'd rather own.

1. Fewer Distribution Channels Limit its Ceiling

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With just $1.33 billion in revenue over the past 12 months, CONMED is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.

2. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

CONMED historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.5%, somewhat low compared to the best healthcare companies that consistently pump out 20%+.

CONMED Trailing 12-Month Return On Invested Capital

Final Judgment

CONMED isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 11.7× forward P/E (or $52.81 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're fairly confident there are better stocks to buy right now. We’d recommend looking at the most dominant software business in the world.

Stocks We Like More Than CONMED

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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