3 Breakthrough Medical Device Stocks to Invest In Now

Medical equipment manufacturers’ stocks are effectively changing the face of the healthcare industry through innovative technologies.

The trend of digitalization in healthcare continues to gain momentum, with advanced medical devices improving healthcare outcomes while becoming key drivers of financial markets. These tools offer accurate diagnoses, effective treatments, and personalized care, significantly improving healthcare outcomes.

Hence, given their potential to revolutionize patient care, these devices will continue to dominate the market and provide huge long-term profits. Moreover, many research bodies are optimistic about the medical device industry, predicting continued growth. KPMG forecasts annual sales growth of more than 5% to approximately $800 billion by 2030, BCC Research forecasts growth from $676 billion in 2022 to $953.4 billion in 2027.

That said, the three leading medical device stocks that currently lead the pack offer strong long-term growth. These companies are pioneers in the medical device niche, boasting solid fundamentals.

Intuitive Surgery (ISRG)

Intuitive surgical (NASDAQ:ISRG) creates and develops robotic surgical systems, introducing its flagship product, the da Vinci Surgical Systems. Thanks to the monster success of the da Vinci, ISRG has transformed itself into a giant in the medical device industry, with its shares generating a staggering return of 888% over 10 years.

From a modest 286 systems in 2004, the number of installations has increased to 8,887 in the first quarter (Q1) of 2024, a staggering 3,000% increase. This exponential growth in da Vinci system installations not only underscores the company’s strategic drive to expand its market presence, but also instills confidence in the company’s future trajectory.

In addition, these systems involve a significant initial investment along with ongoing maintenance and disposable instrument costs, which contributes to a recurring revenue model. Hence, ISRG’s revenue base has grown by double-digit margins over the past few years.

In addition, the launch of da Vinci 5 marks a significant step forward, debuting with eight installations in Q1 alone. Boasting enhanced capabilities, da Vinci 5 sets the stage for groundbreaking advances in robotic surgery.

Dexcom (DXCM)

Dexcom (NASDAQ:DXCM) manufactures continuous glucose monitoring systems at the forefront of a rapidly growing market. As a result, the company has grown rapidly over the past few years, with five-year revenue growth averaging 29.6%. Similarly, its net income margin increased by about 11% over the same period.

Moreover, recent results are in line with historically high rates, underscoring the enduring appeal of its market offerings. Furthermore, DXCM has beaten analyst estimates on both lines for the past seven consecutive quarters.

Looking ahead, the company will continue to benefit from the growing global diabetes epidemic, fueled by rising obesity rates and increasingly sedentary lifestyles. Forecasts from Fortune Business Insights show a great growth trajectory for the diabetes drugs industry, which is expected to increase 7% from $79.25 billion last year to $153.98 billion by 2032. This trend highlights a huge opportunity for DexCom, underscoring its potential for sustained long-term growth.

TransMedics (TMDX)

TransMedics (NASDAQ:TMDX) is another leading medical equipment company known for its innovative organ care system (OCS) technology. Its cutting-edge technology effectively increases graft viability through real-time perfusion, optimization, and monitoring of donor organs. Moreover, with such groundbreaking technology, TMDX stock has enjoyed tremendous success, rising more than 485% in the past five years, outpacing the S&P 500’s gains of 86%.

What’s more, the stock’s stunning performance was supported by spectacular operating results. TMDX has increased sales by 88% over the past five years, with year-over-year (YOY) growth of 149%. Q1 results showed GAAP EPS of 35 cents, beating estimates by 36 cents. In addition, sales came in at $96.85 million, up 132.8% YOY and beating estimates by $13.08 million.

With these strong results, TransMedics raised its revenue guidance for 2024 to between $390 million and $400 million, up 61% to 66% year-on-year. The investment bank The Szczepans recently began analyzing TMDX stock with an overweight rating. The bank praised its pioneering OCS technology and solid financial fundamentals, which have positioned it for long-term growth. If you’re looking for a medical device stock, this is one of the best.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.

As of the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the author’s own, subject to the InvestorPlace.com Publishing Guidelines