Spotting Winners: Inspire Medical Systems (NYSE:INSP) And Medical Devices & Supplies - Specialty Stocks In Q2

Looking back on medical devices & supplies - specialty stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Inspire Medical Systems (NYSE:INSP) 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%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.2% since the latest earnings results.

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. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a softer quarter for the company with full-year revenue guidance missing analysts’ expectations.

“The full launch of our FDA-cleared Inspire V system in the U.S. is an important milestone for Inspire. We have been receiving strong positive feedback from both surgeons and patients who value the simplified procedure and excellent patient outcomes enabled by this next generation technology,” said Tim Herbert, Chairman and CEO of Inspire.

Inspire Medical Systems delivered the weakest full-year guidance update of the whole group. The stock is down 34.2% since reporting and currently trades at $85.80.

Is now the time to buy Inspire Medical Systems? 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 a solid 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 1.7% since reporting. It currently trades at $27.32.

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

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, exceeding analysts’ expectations by 2.2%. It was a satisfactory quarter as it also posted full-year revenue guidance slightly topping analysts’ expectations but a significant miss of analysts’ EPS estimates.

The stock is flat since the results and currently trades at $14.63.

Read our full analysis of Bausch + Lomb’s results here.

Globus Medical (NYSE:GMED)

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Globus Medical reported revenues of $745.3 million, up 18.4% year on year. This number beat analysts’ expectations by 0.7%. Zooming out, it was a satisfactory quarter as it also produced a solid beat of analysts’ constant currency revenue estimates but full-year EPS guidance in line with analysts’ estimates.

Globus Medical delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is up 8.6% since reporting and currently trades at $58.80.

Read our full, actionable report on Globus Medical here, it’s free.

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 result topped 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 8.5% since reporting and currently trades at $105.84.

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

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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