Medical Devices & Supplies - Specialty Stocks Q2 Highlights: Bausch + Lomb (NYSE:BLCO)

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the medical devices & supplies - specialty industry, including Bausch + Lomb (NYSE:BLCO) and its peers.

The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies, although specialty devices are more niche. The capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers.

The 7 medical devices & supplies - specialty stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.6%.

While some medical devices & supplies - specialty stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.4% since the latest earnings results.

Bausch + Lomb (NYSE:BLCO)

With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE:BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.

Bausch + Lomb reported revenues of $1.28 billion, up 5.1% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a satisfactory quarter for the company with full-year revenue guidance slightly topping analysts’ expectations but a significant miss of analysts’ EPS estimates.

“Our continued growth speaks to the breadth and depth of our portfolio and is driven by a mix of hero products and a steady stream of new introductions around the world,” said Brent Saunders, chairman and CEO, Bausch + Lomb.

Bausch + Lomb scored the highest full-year guidance raise of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $14.54.

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

Best Q2: STAAR Surgical (NASDAQ:STAA)

With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ:STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.

STAAR Surgical reported revenues of $44.32 million, down 55.2% year on year, outperforming analysts’ expectations by 9.6%. The business had an incredible quarter with an impressive beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.

STAAR Surgical achieved the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 4.5% since reporting. It currently trades at $28.09.

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

Weakest Q2: Inspire Medical Systems (NYSE:INSP)

Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE:INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.

Inspire Medical Systems reported revenues of $217.1 million, up 10.8% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ full-year EPS guidance estimates.

Inspire Medical Systems delivered the weakest full-year guidance update in the group. As expected, the stock is down 28.6% since the results and currently trades at $93.15.

Read our full analysis of Inspire Medical Systems’s results here.

Integer Holdings (NYSE:ITGR)

With its name reflecting the mathematical term for "whole" or "complete," Integer Holdings (NYSE:ITGR) is a medical device outsource manufacturer that produces components and systems for cardiac, vascular, neurological, and other medical applications.

Integer Holdings reported revenues of $476.5 million, up 11.4% year on year. This print surpassed analysts’ expectations by 2.6%. It was a strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and a narrow beat of analysts’ full-year EPS guidance estimates.

The stock is down 7.3% since reporting and currently trades at $107.30.

Read our full, actionable report on Integer Holdings here, it’s free.

Enovis (NYSE:ENOV)

With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE:ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.

Enovis reported revenues of $564.5 million, up 7.5% year on year. This result topped analysts’ expectations by 2%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.

The stock is up 17.7% since reporting and currently trades at $30.30.

Read our full, actionable report on Enovis 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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