Looking back on medical devices & supplies - cardiology, neurology, vascular stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Penumbra (NYSE: PEN) and its peers.

The medical devices and supplies industry, particularly in the fields of cardiology, neurology, and vascular care, benefits from a business model that balances innovation with relatively predictable revenue streams. These companies focus on developing life-saving devices such as stents, pacemakers, neurostimulation implants, and vascular access tools, which address critical and often chronic conditions. The recurring need for these devices, coupled with growing global demand for advanced treatments, provides stability and opportunities for long-term growth. However, the industry faces hurdles such as high research and development costs, rigorous regulatory approval processes, and reliance on reimbursement from healthcare systems, which can exert downward pressure on pricing. Looking ahead, the industry is positioned to benefit from tailwinds such as aging populations (which tend to have higher rates of disease) and technological advancements like minimally invasive procedures and connected devices that improve patient monitoring and outcomes. Innovations in robotic-assisted surgery and AI-driven diagnostics are also expected to accelerate adoption and expand treatment capabilities. However, potential headwinds include pricing pressures stemming from value-based care models and continued complexity changing from navigating regulatory frameworks that may prioritize further lowering healthcare costs.

The 4 medical devices & supplies - cardiology, neurology, vascular stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.5%.

Luckily, medical devices & supplies - cardiology, neurology, vascular stocks have performed well with share prices up 13.5% on average since the latest earnings results.

Penumbra (NYSE: PEN)

Founded in 2004 to address challenging medical conditions with significant unmet needs, Penumbra (NYSE: PEN) develops and manufactures innovative medical devices for treating vascular diseases and providing immersive healthcare rehabilitation solutions.

Penumbra reported revenues of $354.7 million, up 17.8% year on year. This print exceeded analysts’ expectations by 4.2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ constant currency revenue estimates and a solid beat of analysts’ revenue estimates.

Penumbra pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 32.6% since reporting and currently trades at $299.

Is now the time to buy Penumbra? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: ICU Medical (NASDAQ: ICUI)

Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.

ICU Medical reported revenues of $533.3 million, down 9.5% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.

The market seems happy with the results as the stock is up 17.4% since reporting. It currently trades at $152.18.

Is now the time to buy ICU Medical? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Artivion (NYSE: AORT)

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE: AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

Artivion reported revenues of $113.4 million, up 18.4% year on year, exceeding analysts’ expectations by 2.6%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.

Artivion delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.4% since the results and currently trades at $46.82.

Read our full analysis of Artivion’s results here.

Merit Medical Systems (NASDAQ: MMSI)

Founded in 1987 and now offering over 1,700 patented products across global markets, Merit Medical Systems (NASDAQ: MMSI) manufactures and markets specialized medical devices used in minimally invasive procedures for cardiology, radiology, oncology, critical care, and endoscopy.

Merit Medical Systems reported revenues of $384.2 million, up 13% year on year. This number topped analysts’ expectations by 3.2%. It was a very strong quarter as it also recorded a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.

Merit Medical Systems had the weakest full-year guidance update among its peers. The stock is up 5.5% since reporting and currently trades at $87.65.

Read our full, actionable report on Merit Medical Systems here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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