Medical device stocks are effectively redefining the healthcare industry through innovative technology.
The digitization trend in healthcare continues gaining steam, with advanced medical devices enhancing healthcare outcomes while becoming critical drivers in driving financial markets. These tools offer accurate diagnoses, effective treatments, and personalized care, improving healthcare outcomes substantially.
Hence, given their potential to revolutionize patient care, these devices will continue dominating the market and deliver massive long-term returns. Moreover, multiple research bodies are bullish on the medical device industry, forecasting sustained growth. KPMG is forecasting annual sales growth exceeding 5% to roughly $800 billion by 2030, and BCC Research is projecting a jump from $676 billion in 2022 to $953.4 billion in 2027.
With that said, three leading medical device stocks currently leading the charge offer powerful long-term upside ahead. These firms are trailblazers in the medical device niche, boasting robust fundamentals.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) creates and develops robotic surgical systems, featuring its flagship product, the da Vinci surgical systems. Through the monstrous success of da Vinci, ISRG has evolved into a juggernaut in the medical device space, with its stock delivering an eye-watering 888% 10-year return.
From a modest 286 systems in 2004, installations have soared to 8,887 by the first-quarter (Q1) of 2024, a staggering 3000% surge. This exponential growth in da Vinci system installations not only underscores the firm’s strategic push to grow its market footprint but also instills confidence in the company’s future trajectory.
Furthermore, these systems involve a hefty initial investment along with ongoing costs for maintenance and disposable instruments, contributing to a recurring revenue model. Hence, ISRG’s revenue base has grown by double-digit margins over the past several years.
Additionally, the da Vinci 5 release marks a significant leap forward, debuting with eight installations in Q1 alone. The da Vinci 5, which boasts enhanced capabilities, sets the stage for ground-breaking advancements in robotic-assisted surgery.
Dexcom (DXCM)
Dexcom (NASDAQ:DXCM) produces continuous glucose monitoring systems at the forefront of a fast-growing market. Consequently, over the past few years, the firm has grown rapidly, with its five-year top-line growth averaging 29.6%. Similarly, its net income margin has grown roughly 11% over the same period.
Moreover, recent results align with its lofty historical metrics, underscoring the enduring appeal of its market offerings. Additionally, DXCM has blown past analyst estimates across both lines in the past seven consecutive quarters.
As we look ahead, the company will continue benefitting from the growing global diabetes epidemic fueled by rising obesity rates and increasingly sedentary lifestyles. Projections from Fortune Business Insights show a superb growth trajectory for the diabetes drugs industry, expected to jump 7% from $79.25 billion last year to $153.98 billion by 2032. This trend underscores a major opportunity for DexCom, highlighting its potential for sustained long-term growth.
TransMedics (TMDX)
TransMedics (NASDAQ:TMDX) is another top medical device stock known for its innovative Organ Care System (OCS) technology. Its cutting-edge technology effectively enhances transplant viability through perfusion, optimization, and real-time monitoring of donor organs. Moreover, with such a ground-breaking technology in place, TMDX stock has been a smash hit, surging upwards of 485% over the past five years, outpacing the S&P 500’s gains of 86%.
Furthermore, its head-spinning stock performance has been backed by spectacular operating results. TMDX has grown sales by 88% over the past five years, with year-over-year (YOY) growth at 149%. Its Q1 results showed a GAAP EPS of 35 cents, outpacing estimates by 36 cents. Moreover, sales came in at $96.85 million, marking a 132.8% YOY increase while beating forecasts by $13.08 million.
With these stellar results, TransMedics has bumped its 2024 revenue projections to fall between $390 million and $400 million, representing 61% to 66% growth over the prior-year period. Consequently, investment bank Stephens recently kicked off coverage of TMDX stock with an overweight rating. The bank applauded applauding its pioneering OCS technology and its robust financial footing, positioning it for long-term growth. If you are looking for medical device stocks, this is one of the best.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines