Let’s dig into the relative performance of Penumbra (NYSE: PEN) and its peers as we unravel the now-completed Q1 medical devices & supplies - cardiology, neurology, vascular earnings season.
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 Q1. As a group, revenues beat analysts’ consensus estimates by 3.3%.
In light of this news, share prices of the companies have held steady as they are up 1.4% 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 $324.1 million, up 16.3% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ constant currency revenue and EPS estimates.
Penumbra pulled off the fastest revenue growth but had the weakest full-year guidance update 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 7.3% since reporting and currently trades at $258.
Is now the time to buy Penumbra? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $599.5 million, up 5.8% year on year, outperforming analysts’ expectations by 5.7%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates.
ICU Medical delivered the biggest analyst estimates beat among its peers. The market seems unhappy with the results as the stock is down 10% since reporting. It currently trades at $128.58.
Is now the time to buy ICU Medical? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $355.4 million, up 9.8% year on year, exceeding analysts’ expectations by 0.8%. Still, it was a mixed quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Merit Medical Systems delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.7% since the results and currently trades at $92.95.
Read our full analysis of Merit Medical Systems’s results here.
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 $98.98 million, up 1.6% year on year. This print topped analysts’ expectations by 4.2%. Overall, it was an exceptional quarter as it also put up a solid beat of analysts’ sales volume and EPS estimates.
Artivion scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 24.8% since reporting and currently trades at $29.70.
Read our full, actionable report on Artivion here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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