As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at medical devices & supplies - imaging, diagnostics stocks, starting with QuidelOrtho (NASDAQ: QDEL).

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.3%.

Thankfully, share prices of the companies have been resilient as they are up 7.3% on average since the latest earnings results.

Best Q3: 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 $699.9 million, down 3.7% year on year. This print exceeded analysts’ expectations by 5.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.

QuidelOrtho scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 7.7% since reporting and currently trades at $29.49.

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

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 $1.05 billion, up 6.2% year on year, outperforming analysts’ expectations by 1.5%. The business had a strong quarter with a solid beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ revenue estimates.

Hologic delivered the fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.2% since reporting. It currently trades at $74.96.

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

Weakest Q3: 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 $5.14 billion, up 5.8% year on year, exceeding analysts’ expectations by 1.5%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a narrow beat of analysts’ organic revenue estimates and a narrow beat of analysts’ revenue estimates.

GE HealthCare delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 9.1% since the results and currently trades at $86.63.

Read our full analysis of GE HealthCare’s results here.

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 $384 million, up 1.4% year on year. This result surpassed analysts’ expectations by 5.2%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.

Lantheus pulled off the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 11.1% since reporting and currently trades at $63.58.

Read our full, actionable report on Lantheus 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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