Let’s dig into the relative performance of GE HealthCare (NASDAQ:GEHC) and its peers as we unravel the now-completed Q2 medical devices & supplies - imaging, diagnostics earnings season.
The medical devices and supplies industry, particularly those specializing in imaging and diagnostics, operates with a comparatively stable yet capital-intensive business model. Companies in this space benefit from consistent demand driven by the essential nature of diagnostic tools in patient care, as well as recurring revenue streams from consumables, service contracts, and equipment maintenance. However, the industry faces challenges such as significant upfront development costs, stringent regulatory requirements, and pricing pressures from hospitals and healthcare systems, which are increasingly focused on cost containment. Looking ahead, the industry should enjoy tailwinds from advancements in technology, including the integration of artificial intelligence to enhance diagnostic accuracy and workflow efficiency, as well as rising demand for imaging solutions driven by aging populations. On the other hand, headwinds could arise from a rethinking of healthcare costs potentially resulting in reimbursement cuts and slower capital equipment purchasing. Additionally, cybersecurity concerns surrounding connected medical devices could introduce new risks and complexities for manufacturers.
The 4 medical devices & supplies - imaging, diagnostics stocks we track reported a mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.2% since the latest earnings results.
Best Q2: GE HealthCare (NASDAQ:GEHC)
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ:GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
GE HealthCare reported revenues of $5.01 billion, up 3.5% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ full-year EPS guidance estimates and a solid beat of analysts’ EPS estimates.
GE HealthCare President and CEO Peter Arduini said, “We were pleased with solid orders and revenue performance in the second quarter across all segments, reflecting healthy customer investment in capital equipment. We also reported strong earnings performance while leveraging our lean capabilities and demonstrating progress on tariff mitigation. Overall, we believe we are driving long-term value through our strategic priorities and are well positioned operationally.”
GE HealthCare scored the fastest 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 6.1% since reporting and currently trades at $73.
Is now the time to buy GE HealthCare? Access our full analysis of the earnings results here, it’s free.
Hologic (NASDAQ:HOLX)
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ:HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Hologic reported revenues of $1.02 billion, up 1.2% year on year, outperforming analysts’ expectations by 1.7%. The business had a strong quarter with a solid beat of analysts’ EPS guidance for next quarter estimates and a narrow beat of analysts’ constant currency revenue estimates.
Hologic pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 4.7% since reporting. It currently trades at $67.99.
Is now the time to buy Hologic? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Lantheus (NASDAQ:LNTH)
Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.
Lantheus reported revenues of $378 million, down 4.1% year on year, falling short of analysts’ expectations by 2.5%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ full-year EPS guidance estimates.
Lantheus delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 22.9% since the results and currently trades at $56.
Read our full analysis of Lantheus’s results here.
QuidelOrtho (NASDAQ:QDEL)
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
QuidelOrtho reported revenues of $613.9 million, down 3.6% year on year. This print met analysts’ expectations. Taking a step back, it was a slower quarter as it recorded a significant miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ constant currency revenue estimates.
The stock is flat since reporting and currently trades at $23.64.
Read our full, actionable report on QuidelOrtho 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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