Let’s dig into the relative performance of Neogen (NASDAQ: NEOG) and its peers as we unravel the now-completed Q3 medical devices & supplies - diversified earnings season.

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% since the latest earnings results.

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. This print exceeded analysts’ expectations by 2.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.

“I see tremendous opportunity ahead to leverage Neogen’s strong, longstanding leadership in food and animal safety,” said Mike Nassif, Neogen’s Chief Executive Officer and President.

Neogen scored the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 3.1% since reporting and currently trades at $6.

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

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, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with a solid beat of analysts’ organic revenue estimates and revenue guidance for next quarter topping analysts’ expectations.

Boston Scientific pulled off the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $98.92.

Is now the time to buy Boston Scientific? 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 significantly.

Baxter delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.7% since the results and currently trades at $18.00.

Read our full analysis of Baxter’s results here.

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. It was a satisfactory quarter as it also recorded organic revenue in line with analysts’ estimates.

The stock is down 1.9% since reporting and currently trades at $362.

Read our full, actionable report on Stryker 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 result met analysts’ expectations. Aside from that, 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 5.8% since reporting and currently trades at $125.59.

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

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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