The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Intuitive Surgical (NASDAQ: ISRG) and the rest of the surgical equipment & consumables - specialty stocks fared in Q1.
The surgical equipment and consumables industry provides tools, devices, and disposable products essential for surgeries and medical procedures. These companies therefore benefit from relatively consistent demand, driven by the ongoing need for medical interventions, recurring revenue from consumables, and long-term contracts with hospitals and healthcare providers. However, the high costs of R&D and regulatory compliance, coupled with intense competition and pricing pressures from cost-conscious customers, can constrain profitability. Over the next few years, tailwinds include aging populations, which tend to need surgical interventions at higher rates. The increasing integration of AI and robotics into surgical procedures could also create opportunities for differentiation and innovation. However, the industry faces headwinds including potential supply chain vulnerabilities, evolving regulatory requirements, and more widespread efforts to make healthcare less costly.
The 4 surgical equipment & consumables - specialty stocks we track reported a slower Q1. As a group, revenues beat analysts’ consensus estimates by 1.8% 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 7.4% since the latest earnings results.
Best Q1: Intuitive Surgical (NASDAQ: ISRG)
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Intuitive Surgical reported revenues of $2.25 billion, up 19.2% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EPS estimates but a miss of analysts’ sales volume estimates.
Intuitive Surgical pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 15.1% since reporting and currently trades at $550.94.
Is now the time to buy Intuitive Surgical? Access our full analysis of the earnings results here, it’s free.
LeMaitre (NASDAQ: LMAT)
Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.
LeMaitre reported revenues of $59.87 million, up 12% year on year, outperforming analysts’ expectations by 3.7%. The business performed better than its peers, but it was unfortunately a mixed quarter with full-year revenue guidance exceeding analysts’ expectations but a miss of analysts’ EPS estimates.
LeMaitre delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 13% since reporting. It currently trades at $78.55.
Is now the time to buy LeMaitre? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Integra LifeSciences (NASDAQ: IART)
Founded in 1989 as a pioneer in regenerative medicine technology, Integra LifeSciences (NASDAQ: IART) develops and manufactures medical technologies for neurosurgery, wound care, and surgical reconstruction, including regenerative tissue products and surgical instruments.
Integra LifeSciences reported revenues of $382.7 million, up 3.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS guidance for next quarter estimates and a miss of analysts’ EPS estimates.
Integra LifeSciences delivered the weakest full-year guidance update in the group. As expected, the stock is down 22.1% since the results and currently trades at $13.10.
Read our full analysis of Integra LifeSciences’s results here.
Teleflex (NYSE: TFX)
With a portfolio spanning from vascular access catheters to minimally invasive surgical tools, Teleflex (NYSE: TFX) designs, manufactures, and supplies single-use medical devices used in critical care and surgical procedures across hospitals worldwide.
Teleflex reported revenues of $700.7 million, down 5% year on year. This result was in line with analysts’ expectations. However, it was a slower quarter as it logged a significant miss of analysts’ full-year EPS guidance estimates and constant currency revenue in line with analysts’ estimates.
Teleflex had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 9.7% since reporting and currently trades at $123.60.
Read our full, actionable report on Teleflex 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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