As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the medical devices & supplies - specialty industry, including STAAR Surgical (NASDAQ: STAA) 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, although specialty devices are more niche. 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 7 medical devices & supplies - specialty stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.9%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.4% since the latest earnings results.
STAAR Surgical (NASDAQ: STAA)
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ: STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
STAAR Surgical reported revenues of $42.59 million, down 44.9% year on year. This print exceeded analysts’ expectations by 5.5%. Overall, it was a strong quarter for the company with a solid beat of analysts’ constant currency revenue estimates.
“STAAR’s first quarter sales were in line with expectations, but we can and will do better,” said STAAR Surgical CEO, Stephen C. Farrell.
STAAR Surgical pulled off the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 14.4% since reporting and currently trades at $16.64.
Is now the time to buy STAAR Surgical? Access our full analysis of the earnings results here, it’s free.
Best Q1: Inspire Medical Systems (NYSE: INSP)
Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.
Inspire Medical Systems reported revenues of $201.3 million, up 22.7% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
Inspire Medical Systems pulled off the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 20% since reporting. It currently trades at $127.25.
Is now the time to buy Inspire Medical Systems? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Globus Medical (NYSE: GMED)
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Globus Medical reported revenues of $598.1 million, down 1.4% year on year, falling short of analysts’ expectations by 4.7%. It was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Globus Medical delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. As expected, the stock is down 19.7% since the results and currently trades at $58.14.
Read our full analysis of Globus Medical’s results here.
Bausch + Lomb (NYSE: BLCO)
With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE: BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.
Bausch + Lomb reported revenues of $1.14 billion, up 3.5% year on year. This number came in 0.7% below analysts' expectations. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ EPS estimates and full-year EBITDA guidance missing analysts’ expectations.
The stock is down 15.6% since reporting and currently trades at $11.58.
Read our full, actionable report on Bausch + Lomb here, it’s free.
Integer Holdings (NYSE: ITGR)
With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE: ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.
Integer Holdings reported revenues of $437.4 million, up 7.3% year on year. This result surpassed analysts’ expectations by 2%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ full-year EPS guidance estimates.
The stock is down 1% since reporting and currently trades at $119.06.
Read our full, actionable report on Integer Holdings here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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