As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the medical devices & supplies - diversified industry, including Stryker (NYSE: SYK) and its peers.

The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies. However, the capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers.

The 5 medical devices & supplies - diversified stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.

Stryker (NYSE: SYK)

With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE: SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.

Stryker reported revenues of $6.06 billion, up 10.2% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with organic revenue in line with analysts’ estimates.

“We delivered another quarter of strong sales and double-digit adjusted earnings per share growth,” said Kevin A. Lobo, Chair and CEO.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $368.24.

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

Best Q3: Neogen (NASDAQ: NEOG)

Founded in 1981 and operating at the intersection of food safety and animal health, Neogen (NASDAQ: NEOG) develops and manufactures diagnostic tests and related products to detect dangerous substances in food and pharmaceuticals for animal health.

Neogen reported revenues of $209.2 million, down 3.6% year on year, outperforming analysts’ expectations by 2.6%. The business had a very strong quarter with an impressive beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.

Neogen scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.7% since reporting. It currently trades at $5.61.

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

Weakest Q3: Baxter (NYSE: BAX)

With a history dating back to 1931 and products used in over 100 countries, Baxter International (NYSE: BAX) provides essential healthcare products including dialysis therapies, IV solutions, infusion systems, surgical products, and patient monitoring technologies to hospitals and clinics worldwide.

Baxter reported revenues of $2.84 billion, up 5% year on year, falling short of analysts’ expectations by 1.4%. It was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and revenue guidance for next quarter missing analysts’ expectations.

Baxter delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.3% since the results and currently trades at $18.09.

Read our full analysis of Baxter’s results here.

Boston Scientific (NYSE: BSX)

Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.

Boston Scientific reported revenues of $5.07 billion, up 20.3% year on year. This number topped analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ organic revenue estimates and revenue guidance for next quarter topping analysts’ expectations.

Boston Scientific delivered the fastest revenue growth among its peers. The stock is down 2.2% since reporting and currently trades at $97.71.

Read our full, actionable report on Boston Scientific here, it’s free for active Edge members.

Abbott Laboratories (NYSE: ABT)

With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE: ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.

Abbott Laboratories reported revenues of $11.37 billion, up 6.9% year on year. This print met analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded organic revenue in line with analysts’ estimates but revenue in line with analysts’ estimates.

The stock is down 5.1% since reporting and currently trades at $126.51.

Read our full, actionable report on Abbott Laboratories here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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