Wrapping up Q2 earnings, we look at the numbers and key takeaways for the medical devices & supplies - imaging, diagnostics stocks, including Hologic (NASDAQ: HOLX) and its peers.

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.

While some medical devices & supplies - imaging, diagnostics stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.3% since the latest earnings results.

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. This print exceeded analysts’ expectations by 1.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS guidance for next quarter estimates and a narrow beat of analysts’ constant currency revenue estimates.

“We are pleased to have delivered revenue and non-GAAP earnings growth in the third quarter that exceeded our guidance ranges,” said Stephen P. MacMillan, the Company’s Chairman, President and Chief Executive Officer.

Hologic pulled off the biggest analyst estimates beat and highest full-year guidance raise of the whole group. The stock is up 4% since reporting and currently trades at $67.58.

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

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, outperforming analysts’ expectations by 1%. The business had a very strong quarter with a solid beat of analysts’ full-year EPS guidance estimates.

GE HealthCare scored the fastest revenue growth among its peers. The market seems unhappy with the results as the stock is down 6.5% since reporting. It currently trades at $72.68.

Is now the time to buy GE HealthCare? 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 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 30.5% since the results and currently trades at $50.51.

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 result was in line with analysts’ expectations. However, it was a slower quarter as it recorded a significant miss of analysts’ full-year EPS guidance estimates.

The stock is up 19.6% since reporting and currently trades at $28.35.

Read our full, actionable report on QuidelOrtho 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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