|
|
|
|
|||||
|
|
|
Industry Description
The Zacks Medical Info Systems industry comprises companies that develop and market healthcare information systems. These companies offer software and hardware solutions to healthcare providers with secure access to real-time clinical, administrative and financial data in a time-efficient manner. Focus on patient satisfaction, security of patient data and administrative cost control has increased the need for big data, cloud computing, blockchain and AI. Industry players like Omnicell and Allscripts are raking in millions from the sale of software and related hardware, professional services and IT outsourcing services, and recurring service contracts for software maintenance and transaction processing services.
3 Trends Shaping the Future of the Medical Information Industry
AI and Health: The medical sector is one of the major adopters of AI, which is currently being used to synthesize new compounds for drugs and create devices for more precise measurement and faster and more accurate diagnosis. Starting from generative AI to surgical robotics, one common application of these has been in diagnostic settings. Tools like electronic health records, electronic medical records, predictive analytics and real-time alerting have been gaining prominence. Trump 2.0’s new $500 billion Stargate project to fund infrastructure for artificial intelligence is set to boost this momentum by enhancing data management and interoperability. Going by a Pragma Market Research report, the global AI in healthcare market is expected to hit $95.65 billion by 2025. AI-powered tools are enhancing diagnostics, with innovations like Philips' FDA-cleared SmartSpeed Precise MRI software, Apple’s behavior-based AI model in Apple Watch and Caristo Diagnostics’ CaRi-Plaque tool for coronary CT scans driving more accurate diagnoses and enabling continuous, proactive patient monitoring.
Growing Demand for Remote Healthcare: Within the medical information systems space, remote patient monitoring segments continue to grow at a fast rate, courtesy of the rapid increase in usage of wearable devices and telehealth services. The major driver behind this growth is the increasing awareness about the usefulness of continuous patient monitoring devices. This has proved to be a game-changer in increasing the standard and efficiency of medical care. Further, health tech products are also accelerating the diagnosis process and automating hospital workflows through robotics, AI-driven chatbots and so on. Going by a Custom Market Insights report, the global smart healthcare products market was valued at $145.9 billion in 2023 and is expected to reach $485.71 billion by 2032, at a CAGR of 12.78%.
Tariff Threats on AI Ambition: While Trump’s $500 billion Stargate AI initiative aims to cement U.S. leadership in AI, especially in healthcare, its momentum is being challenged by sweeping new tariffs. A 50% copper tariff, alongside new duties on aluminum and steel (excluding semiconductors), is driving up costs for critical AI infrastructure like servers, power systems and data center components, which are now 10-25% more expensive. This has led hospitals to delay hardware and IT upgrades, with many forming crisis teams amid growing uncertainty. Tariffs are also squeezing the medical device industry’s profit. New levies on copper, steel and electronics have pushed production costs higher, with 88% of healthcare executives anticipating price hikes of at least 18%. As hospitals face tighter margins, procurement delays and supply chain vulnerabilities are increasing, risking access to advanced AI tools for smaller providers.
Zacks Industry Rank
The Zacks Medical Info Systems industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #88, which places it in the top 36% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
We will present a few stocks with the potential to outperform the market based on a strong earnings outlook. However, it’s worth considering the industry’s shareholder returns and current valuation first.
Industry Outperforms S&P 500 and Sector
The industry has outperformed the Zacks S&P 500 composite as well as the sector over the past year.
The industry has gained 12% in the past year against the Zacks Medical sector’s decline of 15.4%. The S&P 500 has risen 11.8% in the said time frame.
Industry's Current Valuation
On the basis of forward 12-month price-to-sales (P/S), which is commonly used for valuing medical stocks, the industry is currently trading at 5.54X compared with the S&P 500’s 5.25X and the sector’s 2.23X.
Over the last five years, the industry has traded as high as 15.19X, as low as 3.56X, and at the median of 5.89X, as the charts below show.
3 Medical Info Systems Stocks to Bet On
Veeva Systems offers cloud-based software applications and data solutions for the life sciences industry. The company’s Veeva Vault is the first cloud-based content management system built specifically for the life sciences segment. Vault CRM, the next-generation CRM for life sciences, is part of Veeva Commercial Cloud, a family of software, data, and services to advance commercial excellence in life sciences.
Veeva Systems currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for fiscal 2026 earnings indicates a 15.8% improvement from the year-ago level. For fiscal 2026, the company is expected to report revenue growth of 12.8%.
10x Genomics is a life sciences company that develops instruments, consumables, and software for advanced biological analysis across the Americas, EMEA, China, and Asia-Pacific. Its key products include the Chromium platform for single-cell analysis, the Visium platform for spatial gene and protein expression and the Xenium Analyzer for high-resolution in situ RNA detection in tissue samples. 10x Genomics currently holds a Zacks Rank #2.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2026 earnings indicates a 27.8% jump from the 2025 level. For 2026, the company is expected to report revenue growth of 5.8%.
Insight Molecular Diagnostics is a precision diagnostics company developing and commercializing advanced tests in the United States and internationally. Its pipeline includes DetermaCNI, a blood-based tool for early cancer treatment monitoring, and DetermaIO, a gene expression test predicting immunotherapy response. The company also offers transplant monitoring solutions, VitaGraft Kidney, VitaGraft Liver and GraftAssure.
IMDX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2025 earnings indicates a 43.5% jump from the 2024 level.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).
| 9 hours | |
| 9 hours | |
| 18 hours | |
| Jul-14 | |
| Jul-13 | |
| Jul-12 |
Urban Outfitters, Micron Lead 5 Stocks Near Buy Points As Earnings Season Nears
VEEV
Investor's Business Daily
|
| Jul-11 | |
| Jul-10 | |
| Jul-10 | |
| Jul-10 | |
| Jul-09 | |
| Jul-08 | |
| Jul-07 | |
| Jul-04 | |
| Jul-03 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite